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Technology Stocks : Nortel Networks (NT)
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To: t2 who wrote (12146)12/24/2001 3:21:50 PM
From: dean poets  Read Replies (1) of 14638
 
Rally? Or selling opportunity?

If the best this company can do is lose approx 2 billion on an annual basis, why the hell are investor's willing to pay $11 + a share? The market cap of NT is approx 23 billion. Why would any sane person buy shares of this company, other than to use it as a tax loss?

Revenue has dropped to about 1/3 from the peak a year ago. NT shows no signs of returning to profitability for years. Losses are piling up, and who knows when creditors will wise up, and notice we are in a severe recession. A lot of people are looking for a recovery in the economy, but maybe the first question people should ask is when will the reccesion start to slow down? We aren't even close to the end.

Today's investor's are conditioned for a rising market, when almost every stock goes up. But in a severe downtrend like we see today, it might actually turn out to be a great selling opportunity.

The recent losses include a one time restructuring charge of 1.5 billion. Analysts try to make you think these charges are irrelevant. Although if the company has a profit do to an acquisition, they make you think these are an annual profit. Then they tell you the company is growing 15-20% a year. Why not pay a $125 a share?

If the mutual funds & institutions aren't buying, that might be a dead give away. Let the small guy buy the shares.
Remember BRE-X, the small guys were buying that stock days before it was announced as a fraud. I don't mean to compare apples to oranges, but a dead dog is a dead dog.
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