Nokia last announced a stock split on February 12, 1998 -- the same day it announced record earnings for 4Q and FY 98. As you may recall, the stock closed at a pre-split price of 81 3/4 on February 11, 1998. On February 12, the shares gapped up to around 87-88 at their open. B/c Nokia last announced a split after the market closed on February 11, but the before market opened on February 12 -- it's fair to say the company last announced a split when the shares were in the 81 3/4 - 88 range. Oddly, today's range is quite reminiscent the range for February 11-12 (w/in a few dollars!). Anyhow, as someone pointed out -- the split was distributed on April 16, 1998.
My point? Nokia will most likely announce some sort of split tomorrow. Traditionally the company has gone for 2-for-1s, but w/ so many shares outstanding, a 3-2 might be possible (though not likely).
During today's downdraft, I picked up some Aug 90 calls, in anticipation of a strong earnings report, a split announcement and favorable market reaction to such. Yes -- most expect Nokia to beat current estimates -- but I'm confident the numbers will be super. TLAB, LU, QCOM -- telecom equipment players like Nokia -- have all crushed street estimates recently. Only Nokia gave investors an opportunity to buy the day before earnings by falling some 10% in the previous 2 trading days.
When QCOM beat earnings a few days ago, the stock jumped almost 20%. Granted, there was more uncertainty associated w/ QCOM, so when the earnings came out, the shorts dumped and mo-mo guys hopped on for a nice ride -- but Nokia had corrected some 10% before recovering nicely over the course of the last minutes of trading today.
People love strong earnings, splits and bullish trends. Nokia will hopefully deliver. Analogize all you want -- LU didn't announce a split (a slight disappointment) and TLAB and QCOM exploded after their earnings releases. I believe that Nokia will do the same. And remember, QCOM took on a day fraught w/ negative market sentiment and movement -- Scott. |
