Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: sylvester80 who wrote (12897)	6/4/2002 11:46:07 AM
From: sylvester80	Read Replies (1) \| Respond to of 14638

Well... seems my guess was pretty close eh? I said 10-13% dilution, UBS Warburg says 14%. biz.yahoo.com Tuesday June 4, 10:02 am Eastern Time Reuters Company News Nortel stock plummets on financing bid (All figures in U.S. dollars unless noted.) OTTAWA, June 4 (Reuters) - One day after shares in Nortel Networks Corp. (NYSE:NT - News; Toronto:NT.TO - News) were trampled by investors fearing the worst from another financing round, the stock collapsed to new lows in early trade on Tuesday amid concerns the company will need to raise even more cash. ADVERTISEMENT Nortel, whose cash reserves and sales are tumbling amid a global downturn in demand for telecommunications equipment, said after the market's close on Monday that it will raise $800 million in a combination of equity units and 150 million common shares. The company, which lost $27.3 billion last year and had its credit rating cut to junk status, did not raise as much money as some investors suspected in the equity offering. Nortel had filed last month to sell as much as $2.5 billion in securities. The stock touched a new low of C$2.88 a share on the Toronto Stock Exchange, below the previous nadir of C$3.00, and $1.89 on the New York Stock Exchange, from a previous low of $1.95, in early trade on Tuesday, the lowest levels in more than a decade. Shares rebounded moderately to trade at C$2.91 on the TSX, a decline of 10 percent, and $1.90 on New York, a dip of about 9 percent. The battered stock touched the C$3 mark on Monday amid rumors the offering could be as high as $1.5 billion. "I think that it's a step in the right direction for them. It gets them half way to where they need to be in terms of their funding requirements for the next year," said Inder Singh, analyst at Prudential Financial. "I think that more will be coming, either in the form of asset sales or more (financings)." UBS Warburg estimated in a recent report that Nortel will need to raise $1.6 billion before the end of 2003. While the equity issues give Nortel a much-needed cash infusion for the next two quarters, it will further dilute the stock, Singh added. "I'm guessing that it's around 4 percent dilution this year and 14 percent dilution eventually within three years. So it's not insignificant," he said. ($1=$1.53 Canadian)