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To: Johnny Canuck who wrote (43076)	2/16/2006 11:14:51 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69211

Nortel considers stock consolidation By Leo Valiquette, Ottawa Business Journal Staff Thu, Feb 16, 2006 3:00 PM EST Mike Zafirovski, Nortel president and CEO Nortel Networks's stock price has languished under $4 despite a concerted effort by new management to engineer a makeover and the company is ready to do something about it. In a regulatory filing made Thursday with the U.S. Securities and Exchange Comission, Nortel said it is considering a stock consolidation, or, in corporate speak, a "reverse stock split," according to a report from Reuters. In the filing, the telecom equipment maker proposes allowing the board to decide on the magnitude and the timing of a reverse stock split anytime before April 11, 2007. Shareholders will have the right to vote on the proposal at Nortel's AGM slated for May 2. Nortel has 4.34 billion shares outstanding, but that total is likely to increase with the proposed settlement Nortel announced last week to shut down a pair of investor lawsuits. Under the terms of the proposed settlement, Nortel would issue about 629 million more shares to shareholders in addition to $575 million in cash. In theory a consolidation move boosts a company's share value because it means the same market cap diluted among fewer shares. Analysts, however, often have a sour eye for such attempts to engineer a higher stock price. In many cases, the gains evaporate in a matter of weeks or months. One dramatic example of this came in late 2003 with Rod Bryden's last major attempt to refinance WorldHeart and regain its listing on the U.S. Nasdaq. A seven-for-one consolidation briefly boosted the company's stock price past $12. However, disappointing fiscal results over the next several quarters drove the stock price down below $2 by August 2004 and also contributed to Mr. Bryden's departure from the CEO's chair. Nortel itself has been down this road before. In 2003, shareholders approved a reverse split of five-for-one or 10-for-one. Nortel did not proceed with the plan. Separately in Thursday's filling, Nortel also said new CEO Mike Zafirovski was given a restricted stock unit award of $6.95 million and a salary of $252,380 with no bonus for the remainder of 2005 after he came on board in mid-November. These amounts do not include the millions in additional funds Nortel paid to him to settle a lawsuit launched by his former employer, Motorola. Mr. Zafirovski's annual base salary is $1.2 million. He has also been granted five million stock options with an exercise price of $3.10 that expire in 2015. [Harry: I have to agree most investor will not be fooled. If they want a higher stock price and more institutional interest they need to start to execute.]

To: Johnny Canuck who wrote (43076)	2/17/2006 8:46:46 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69211

U.S. prices rise faster than expected Last Updated Fri, 17 Feb 2006 09:40:35 EST CBC News Rising prices for electricity, food and autos pushed U.S. producer prices up 0.3 per cent in January, while the cost of other goods and services climbed 0.4 per cent, twice as high as expected. The U.S. Labour Department report also indicates wholesale inflation is rising faster than expected, stirring fears that the Federal Reserve will push interest rates up at its next meeting in March. Wholesale prices rose more than expected in January The market had expected a rise of 0.2 per cent in January, a far cry from the 0.6 percentage point gain in December. The report suggests underlying inflation pressures were somewhat higher last month than financial markets had expected. The Federal Reserve has raised short-term interest rates 14 times since June 2004 in a bid to head off the pressure of rising prices, and another rate hike is anticipated in March. The producer price index was up 5.7 per cent from January 2005, driven mostly by a 25 per cent surge in the price of finished energy goods. However, core prices have increased just 1.5 per cent in the last 12 months, suggesting energy price increases are not passing through to other goods. Energy prices were flat in January. The cost of residential electricity soared three per cent, the largest monthly gain on record, while the price of residential natural gas climbed 0.8 per cent. Those increases were offset by a 3.5 per cent drop in the price of gasoline and a 6.8 per cent decline in liquefied petroleum gas. FROM FEB. 16, 2006: Oil prices rise above $58 US a barrel following previous day's steep drop Food costs rose 0.2 per cent after a hefty 0.8 per cent gain in December. The Labour Department said the price of passenger cars climbed 1.1 per cent, while the price of light trucks was up 0.7 per cent and civilian aircraft prices were 0.7 per cent higher.