Nortel (NYSE:NT) has disappointed investors again. Long term telcom equipment and Nortel investors must be getting used to the pain. So what does management do? Lets buy our way out of this mess. Nortel Networks is in takeover mode, CEO Mike Zafirovski has announced. Wall Street has been speculating for a while about the maker of telecommunications equipment.
Nortel who when riding high had acquired many a company using its own stock as currency. This option is not as attractive at the present time. The takeovers will need to be financed in cash. This will compete with internal organic opportunities. If too many internal projects get bumped then in house R&D will conclude "Whats the point" and Nortel will have to make acquisitions.
The sector is still staggering about not having recovered from its last boom. Many companies future's are openly questionable. If you had a neat little start up that was worthy of a lucrative buy out where would you make the deal.
I still think Motorola (NYSE:MOT) should buy out Nortel and hopefully kill two problem birds with one controversial deal.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment