9:53 PM MST, 14 Jan 2009 Update: An interesting piece from National Post, “The long, sad fall of Canada’s corporate giant“.
7:17 AM MST, 14 Jan 2009 Update: It is official, see Nortel’s press release announcing it is going chapter 11 and is seeking CCAA protection. CBC news reports here. National Post reports here. Andy Willis has two further blog entries about Nortel “The lessons of Nortel” and “Nortel fall a win for short sellers“.
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Globe and Mail is reporting early Jan 14 morning that (emphasis added),
“Former technology titan Nortel Networks Corp. [NT-T] is expected to file for bankruptcy protection as early as today, sources say, a move that will likely see what was once Canada’s great corporate success story broken up and sold to foreign rivals.
Nortel’s board of directors was meeting last night to deal with a financial crisis, as the economic downturn translates into a sharp drop in orders from phone company clients. The telecom-hardware manufacturer failed to find buyers for a number of divisions that were put up for sale in September, and faces the prospect of paying $107-million (U.S.) of interest on its debts tomorrow.”
If it is true that Nortel is filing for bankruptcy protection this morning, then this one-time stock-market darling, which market cap was larger than the biggest bank in Canada (and may be the big 5 combined?), has truly fallen from grace. It is a sad page for people who lost their jobs, lost money investing in its stocks, and even for those that bet against the stock (by shorting it) may feel a bit of sadness as this giant falls.
P.S. Some say Nortel is a Canadian company that must be saved. I don’t think so. Newer and better run technology company will replace the once powerful Nortel one day. A part of the cycle of creative destruction. I am still saddened to see Nortel goes if Nortel is indeed filing for bankruptcy protection.
P.P.S. I still remember the Nortel discussions I had with someone at work before the tech bubble burst. I kept saying may be it is good to sell some shares and take some profits as the share prices were totally disconnected with its earnings but my colleague kept saying Nortel was viewed as a buy-and-hold stock. Ah, I will always remember that lesson.
P.P.P.S. I am truly sad for people who lost money investing in Nortel.
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Wednesday, 14 January, 2009 at 1:01 AM
Yeah, Nortel, Corel and PMC, used to be Canada’s 3 biggest company in term of market cap. Sigh.. Corel is gone, Nortel is soon, will my company be next?
Wednesday, 14 January, 2009 at 1:22 AM
Horace,
Sorry, I don’t know enough about PMCS to say. First places to look are the cash, cash generating abilities, and debt positions, interest payments, etc of the company. No an easy thing to say without some work. Wishing you best of luck with PMCS.
As an aside, let me end on a positive note, in our paradoxical world and time. As Warren Buffett said, “cash combined with courage in a crisis is priceless”. There are some solid company that are crazy under-valued right now but the problem is who has the extra cash? And who has the stomach and patient to invest, not for next week, month, or a year but for YEARS potentially to see returns.
Kempton
Friday, 23 January, 2009 at 12:48 PM
Here’s my purely emotional reaction, and a former believer in BNR and its works…
Friday, 23 January, 2009 at 6:17 PM
Dick,
Thank you so much for sharing this picture of the BNR pin and your thoughts. Your are so right that BNR used to be a symbol of something great.
At the same time, the unfortunate price of running a great business to the ground is for it to disappear. An example of Creative Destruction.
Cheers,
Kempton