Face it, folks. By cutting the dividend and offering nothing optimistic for the future, Elop pretty much killed Nokia's best chance to get back over $5. There is ZERO chance that Nokia can outperform the market in the near term. Nokia climbed so high because (1) the market has been gangbusters in January and (2) Elop threw investors a bone with the pre announcement on the 9th. Then he raped those same investors on the CC on the 24th. Talk about burning a platform!
Now all that is left is for Nokia to move with the market. If this overbought market heads south, then Nokia will retrace to $3 or less. As I write this, the last of the sheep are dumping their money into mutual funds and doing what they do best - buying at the top. The big boys are herding as many of them as possible for the big shearing. This is what market tops look like. No doubt about it.
Nokia has to be afraid of something in its near term future. Think about it...
Cutting a dividend completely is a sign of desperation. Companies that do that are in serious cash burn or will soon be in serious cash burn. If things were so rosy for Nokia for the next two quarters, then why cut the dividend? What are they afraid of? The Lumias are now all out there and Nokia has enough money to finance production. If they were going to turn the money over like Flipper, then why cut the dividend?
The numbers at the CC don't lie. Nokia barely eeked out an operating margin in Smart Devices in the best quarter of the year. Nokia also expects to lose money again in Q1. The good results of NSN (12% operating margin) won't be replicated and its margins will come back down to 3%. Maps is expected to lose money. Devices is expected to be -2%.
Analysts are looking at -.05 loss in Q1. It took a miracle to beat estimates in Q4, a peak season. Now longs here expect another huge beat in the slowest quarter of the year. Completely unrealistic.
Cutting the dividend says something about how Nokia feels about the future. And it isn't positive.
There were a significant number of cheerleaders out here exclaiming what a good thing it would be for the company to eliminate the dividend. In essence, what they have no clue about is that there are 2 things that you do not want to do, one is a reverse stock split and eliminate the dividend. Both of these communicate to the market that the company is in financial trouble. So many cheerleaders jumping up and down being ignorant which they basically communicated "I like to see the dividend cut that reigned supreme since the company iniated it and have the stock price damaged". One of the things considered as a holy grail, you do not damage it. Now without the dividend, there is nothing to keep Nokia in anything other than a day trader to short at will and to keep the price as an option play. With the dividend removal, especially at how low Nokia is going for, it could be a long long time before there was any real price appreciation or considered investment grade. Short term sellers will rule for quite some time going forward.
Many "sophisticated" financial genius's here can't put 2+2 together. Div cut in half, followed by div GONE. Sends a very strong message to the market.
Àpple will be increasing their div, cause that's what you do with cash.
Everything I anticipated 8 months ago is just starting to come fruition. This is a TURNAROUND story. It takes time. Last year at this time people were wondering if NOK could even survive. A year later those thoughts aren't even relevant,
Groovenirvina is clear a short term player or a short. Long term fundamentals on this company continue to improve week by week. I don't see one thing he wrote... compared to 8 months ago... that make me even think Nokia is heading the wrong way.
Groove, I see that the basis of your argument is the "profit margin" being low last quarter in terms of lumia/smartphones. Now since the Qtr of sales was not a full Qtr because of its availability in terms of it's (lumia/smartphones) release and the fact there were component shortages , it seems only natural that the margins would be minimal . Think about this just for a moment, you have a product being manufactured for retail.This "product" uses many components made and bought from various companies. These components are ordered and paid for in say 30/60 days. Now you have a shortage of a component which halts manufacturing of your retail product. Your other vendors don't care about the shortage problem you have, they expect to get paid. Now you have components that are paid for without a product to fulfill orders. In other words , no return on your retail product. By the time shortages are reversed, we are at the end of the Qtr. So it's "probable " that "profit margin" on that line of retail products would be less than optimal. If given a chance to sell a full Qtr without delays or constraints , one will be able to see the true margin, whether good or bad. Just my 2 cents
Groovenirvana: Even though your English is pretty good and the passion to convince the NOK shareholders to handover their shares cheaply to the covering-shorts is persistent, your angst is obvious, that no matter what, you do not want NOK pps to rise presently. The fact that you have to post so many times here, essentially harping on the same message, makes it obvious to many holders. My float calculations indicates that the game for shorting NOK is over now. You'll see a tremendous rise this year in NOK pps. The company's solid cash position now creates an underlying put-option automatically, to buyback shares nicely. Big institutional investors are behind it now, supporting the stock. Your shorting efforts would be better spent somewhere else, in some totally overbought securities presently ... rather than here in NOK ... which is just starting its second beautiful life! There are many fishes to fry in the market at any time, why bother an emerging fish, which is clearly showing signs of life now and is undervalued by any measure .. that is, unless, of course, you are a trapped/greedy short.
Sentiment: Strong Buy
Nokia has traded in the range of $1.63 - $5.87 throughout the last year. This high volatility shows that no one is buying the stock for its dividend yield, and the management has taken the correct decision by cutting the dividend entirely.
Sentiment: Strong Buy
I disagree with you, Nokia made a great decision in cutting out dividends for last year, they can use the 1.0 billion dollars to increase production and development. China and India started selling Lumia 620/820/920 and Asha line and the first qtr will be better than suggested by analyst (most of them are #$%$). The super new Lumia 620 will be a runaway hit. In short, people will fall in love with the 620. It looks awesome. It feels awesome. And it runs Windows Phone 8 (build 10211 aka 'Portico'). Sporting a nice and contrasty 5MP rear shoot, front-facing camera and expandable storage, the 3.8” 800x480 (ClearBlack) device may seem like a light weight compared to the 920 but thanks to the OS, you’d hardly know it.Indeed I haven’t noticed much of any lag with the OS for regular functions, even though it “only” has a dual-core 1GHz Snapdragon CPU and 512MB of RAM. That’s good news and it feels way nicer than it’s predecessor, the Lumia 610. While I liked the 610, I think the consumer is getting much more bang for their buck with the 620 both in terms of quality and performance. Speaking of price, the 620 goes for around $300 unlocked and sometimes lower. You can pick it up on Expansys or through various regional carriers and I recommend you do so. Sadly, no US carrier is on board, which is shame. If AT&T were to offer this for $0 on contract with LTE, it’d be quite huge.
Sentiment: Strong Buy
Last year Nokia paid a dividend in the middle of an unresolved cash crunch and was roundly criticized for it. This time they did the responsible thing and eliminated it (for now) and folks are still upset. Wow.
If you're in Nokia now you had better be in it for the turnaround, and you had better have a 1-2 year investment horizon. If not, you're in the wrong stock.