I posted this over on Yahoo:
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Just finished reading a new Smith Barney report, this is actually a rare example of good work from an anlayst. There is plenty in there for bulls and bears, I'll try to summarize.
For the bears:
- It is possible, SB gives it a 25% probability, that Nortel will need to fully restate 1999 and 2000. I kinda suspected this. If so, it could take as long as <gulp> another 9 months, into 3Q05. Nortel would most likely be delisted on the NYSE in April in this case, probably not in Toronto. They don't think any of the other shoes would drop, like bondholders calling bonds, etc. After restatement Nortel would be re-listed with little issue, but it likely would trade down from here in the interim.
For the bulls:
- The business seems to be doing well, with the exception of losing the Cingular contract. There clearly is a time value issue here, Nortel should be a $5-$6 stock based on current business trends, but how long is it going to be to realize that.
I hope I did the report justice, even though I am a bagholder here.
Cooters |
