ALU investors relations told me the price is .55 of the "newly issued shares of Nokia" which means whatever the price of Nokia is on the day of closing.
So if NOK goes down to say $5, I haven't done the math but likely to be around $11B. Thats a far cry from $16B. ALU investor relations told me today that ALU ADR holders will receive .55 of the "newly issued ordinary NOK shares' which means whatever NOK is trading at on the closing date. This thing stinks to high heaven. NOK can only hope and pray their stock continues to crate over the next 12 months, they pick up ALU on the cheap and then NOK shares trend up.
You are right on the money. NOK could care less and would actually prefer if the market pounds down their stock until closing. The problem is the $16B+- agreed on. Hows that come into play.
Bruno- read the press release. "implied" offer price of EUR $4.27 based on NOK at $7.77.
"Offer value based on Nokia’s unaffected closing share price as of April 13, 2015 of EUR 7.77 and offer exchange ratio of 0.550x, resulting in an implied offer price of EUR 4.27 per share"
Thats what I thought too.....we get .55 of $7.78, but I was dead wrong. I emailed ALU investor relations today. We get .55 of the "newly issued shares of NOK" at the closing. Nobody knows what price that will be. If the newly issued shares at $4, we get $2.20. If the newly issued shares of NOK are $8, we get $4.40. If they're $10 we get $5.50. Bottom line is ALU shareholders got screwed. Odds are ALU earnings will not be pretty, but quite frankly, I don't think it will matter all that much. Management on both sides knew that when they cut the deal. We're glued to the NOK share price until closing. On the other hand, just because both boards have approved does not make this a done deal. My guess is NOK will wind up sweetening the deal.
Today's reply from ALU:
"We cannot predict the movement of ALU and NOK shares between now and when the deal closes. What we can tell you is that for every share of Alcatel-Lucent you own, you will receive 0.55 shares of Nokia, regardless of market price.
From ALU Investor Relations. This is old news by now....." ALU ADS holders will receive .55 newly issued ordinary shares of Nokia. The question is how is anybody supposed to know what the "newly issued ordinary shares of NOK will be?
Alcatel-Lucent ADS holders will receive 0.55 of a newly issued ordinary share of Nokia (subject to adjustments for any dividend other than the previously proposed Nokia dividend for 2014).
Fear and uncertainty rule regarding this so called buy out, thus people are jumping ship. Management on both sides are to blame for this fiasco. There is no clarity regarding exactly as to the effective date of this .55 stock swap. There's no way ALU would sell their shareholders down the creek saying we're selling the company in exchange for .55 shares of NOK: whatever that share price is 12 months down the road. If NOK is trading at a buck a share when the deal closes ALU investors get 55 cents ? Never gonna happen.
That's your opinion, I respect that, but this plunge is an over reaction by the market until some there is some clarity on the precise details of what I call the merger between ALU and NOK. I'm not jumping ship at this stage, although it's clear a lot of investors are. Where there is uncertainty, there are down markets.
I'd say the fall from $4.90 to 3.43 would no doubt be considerd a trap. Uncertainty on the part of both ALU and NOK intentions is causing the precipitous fall. NOK earnings do not justify this action. The market (including myself) doesn't have clarification on whether the .55 stock swap is as of the date of the announcement (some $16B US) or whether it's directly tied to the price of NOK at the time of closing. I can't believe ALU would make a stock sway not knowing or having any clue as to the price when the deal closes sometime in 2016. ALU management is already throwing the shareholders under the bus as it is in the $4.40/share range.
Looks like there's a gap on the charts around 21.30. Likely to be filled. If we keep our fingers crossed that will be the bottom. I'm growing old waiting for this stock to move. I'll probably croak before it makes it's move.
Conservative old deadbeats that run a tight ship. Not much incentive for new investors to own shares. The fossils need to be put out to pasture. All longs can hope for is the split of DOW Chemical would might put some cash in longs pockets and boost the share price which could be substantial.
Nov. 13 (Bloomberg) -- Dow Chemical Co. said its partner in a 71-year-old silicone venture that’s on pace for $6 billion of annual sales wants to sell its half of the business, and Dow could be the buyer.
Corning Inc. has “more priorities” than the Dow Corning partnership since it bought Samsung Electronics Co.’s stake in a separate venture, Dow Chemical Chairman and Chief Executive Officer Andrew Liveris said yesterday in a presentation to investors.
This is a done deal. Unfortunately, there will be no other competing buyers considering the French governments conditions to which Nokia has consented.
While Combs was executing the "shift" plan, us shareholders got the "shaft". Pure and simple. Been through these kinds of things before. It's not right, but all things considering there probably isn't much shareholders can do about it. I'm sure the French government has stipulated conditions to which Nokia has consented to and not too many other buyers would have. The long and short of this merger is ALU shareholders got short changed. The company is worth more and everybody knows it.
Article from Seeking Alpha
Mr.nokia, If you really understood the financials of ALU, you are foolish to make that statement. However, the market does understand and is reacting accordingly. If this buyout or merger does materialize, in all likelihood shareholders of ALU will realize share value exceeding $6
A lot of gurus will tell you never to add to a position when your stock declines, but after 25 years of investing, its the only way I've ever made any real money. This company's fundamentals are sound, but with that said, we all know management lacks communication skills not only with stockholders but the public in general.