Full disclosure: Positions in both since July/August 2012.
What do I want (NSN)
What do I want to sell (ALU)
My current thinking leads towards NSN attempting to purchase Small Cells. Submarine.
This leaves both with 30,000+ patents each. As well as R&D.
Or--- ALU keeps Small Cell, and NSN takes over fiber optic/4G(5G,whatever)..maye this is more likely.
Allowing NSN to consolidate this market. Allowing ALU to focus upon it's new brainchild. Continue router, Bell Lab, etc.
If I am NSN, I attempt to acquire submarine regardless.
This deal allows NSN to continue consolidation per Seimens buyout, whilst trimming ALU in Combes quest to return to profitability.
Let us not forget, this is just what he did with Vodafone, and has been the obvious path since his hire.
Wild Card: Qualcomm.
If you look at Nokia as a whole company and where it started from to where it is now; It with mills, to pumps to boots to electronics to phones to smart phones and now to networking. Nokia is unlike most other companies; they keep reinventing themselves. The problem is that most investors are so short sited that they can't see past the mobile phone business which is now a low margin business unless your apple and you can put garbage out there and people will pay a premium. I believe it's a smart move, it puts them at the front and ahead of most companies in that arena. Ericcson is still the dominant player in that field. Qualcom produces mainly onboard chips for the phones and mobile devices and I don't think they would get into this game but who knows right. Anything is possible but I'm excited for nokia and intend to retire off nokia stocks 40years from now. I believe these stocks are so undervalued that in the future these stocks will be in hundreds of dollar ranges if you all can hold on that long and invest wisely and smart and not pay attention to the ups and downs of each and every penny.
Sentiment: Strong Buy
I doubt NSN could handle ALU fiber optics division since that requires the support of Bell Labs research entity and that's not for sale. Also, the fact that NSN had sold its Optical Network Division to Marlin Equity makes it even more unlikely for such a move. I think NSN wants the ALU Wireless Division because ALU has strong hold on North American markets where NSN lacks and the fact that QCOM is now partnering with ALU in the joint research and development of the next generation small cells could change the wireless landscape g-forever leaving NSN completely out of the picture. Basically, NSN is now fighting for its future survival and relevancy.
I find it interesting that many folks seem so bent against a purchase or partnership with ALU. Personally I think acquiring the business would be a sound forward looking investment. As we have discussed, the infrastructure business is low margin overall, but what gets overlooked is that it is cyclically recurring and it is HUGE. There is growth into new areas/markets (some regions are still on 2G or primitive 3G) and upgrade cycles as technology evolves, and this is not going away. NSN has a decent size at this time, but as in any scaled enterprise (especially one with modest margins) the way to turning a good profit is to do what you do A LOT.
Basically, the rules of business:
Buy low, sell high.
Go big or go home.
ALU has struggled under its own weight, and part of that is that it isn't big enough to be efficient. Combine NSN and ALU resources, trim the fat, and you've got a hefty engine with a turbocharger going forward. Acquiring assets isn't necessarily about buying in to a business to continue an outmoded business model... it's buying assets divorced from a business model to enhance the one we have underway. The way to domination in the infrastructure market is pretty much size alone, granting the evolution of technology will take place regardless of who provides the guts to implement it.
Let me try to esplain it to you Lucy
There is a reason most stocks trading under $5 never rebound......they're losing $$ with little or no chance of making money in the future. NOK got to $2 because of their cash burn (hello BBRY) but MSFT wasn't going to let NOK go under...just close. Does ALU have a MSFT 65 Billion $ saftey net
Pull up the last 3 earnings estimates for NOK & ALU...NOK EPS beat every quarter & ALU missed
For every $2 stock that quadruples or becomes a 10 bagger...theres 8-9 that take a dirt nap
The key is finding them
Its not like college when your best friend asks you to go on a blind date w his hot girl friends "best friend"...this is money not friendship and I will sell if that happens
I'm not taking one for the ALU team even if I was wearing 2 condums
I think NOK has been an outstanding company for more than one century, because it was managed and operated mainly from Finland. Adding ALU will create unnecessary integration issues while they would still be in deep reorg mode after D&S sale, it would also make the company less finnish, and I don't like that. I understand your point but I am not even thinking of Nok getting into such a bumpy road at this turning point of its history. It is too early, and I still think that all this ALU noise is organized by external forces who have interest in the deal, or at least interest in the current hype. If you read the Reuters article "Exclusive: Nokia weighs Alcatel tie-up after Microsoft deal - sources" you clearly understand this is pure speculation, as per my yesterday "fried air" comparison.
I have to disagree - NSN just restructured which is why their Operating Margins are higher (IMO) than ERIC or ALU. Buying someone right now would just cloud the picture of what NSN is really worth. If you really want the market to efficiently price NOK we need two solid quarters of earnings for NOK ex D&S.
Wow, all the thumbs down... I feel so honored to be taken so seriously that not one of my detractors can even formulate a reply, but simply thumbs down in disgust. Certainly the.pathetic1 and his many aliases at work again. Gosh, I just love this board.
I hope this noise of a possible purchase of ALU (any portion) is just a vicious rumor....ALU is a dog w fleas and their stock price reflects it...they're up because of NOK speculation...NOK would be over $7 right now w/o this ALU garbage IMO
NOK has burned ca$h like a druken sailor for yrs...we haven't even received the MSFT buyout money and theres talk of buying ALU?...thanks but no thanks I will bail
I think NSN will not buy fiber optics unit as they have been purging their non-wi-fi technology.
It would be best for NOK to let the French be. It is impossible to trim any business in France.
It is very difficult to terminate someone in France. Even if you do terminate someone, you get a 3 months notice and still have a bunch of social protections and benefits. To actually terminate someone, it has to be pretty bad and they can still go to court and win. It would be better having a partnership, which I think might happen.