Shares of Nokia Corp. (NYSE: NOK) have hit new 52-week low of $4.01 today following a downgrade from Barclays. And the hits just keep on coming.
The company’s credit default swaps (CDS) have hit a new high of 500 yesterday, a jump of 70 basis points. That jump came a day after the company warned on earnings (our coverage here) and offered buyers a free phone as the result of a glitch in the Lumia 900, the company’s first phone to use the Windows Phone 7 operating system from Microsoft Corp. (NASDAQ: MSFT).
A large part of Nokia’s problems, though, are not the new phones, but collapsing sales of the older feature phones that use the Symbian operating system. The falling price for smartphones makes them more attractive because they offer so much more functionality for a small difference in price. The $100 Lumia 900 from with a two-year contract from AT&T Inc. (NYSE: T) would have been a terrific buy if the device hadn’t had a problem right out of the chute.
Nokia’s brand has been battered (see our story on America’s Nine Most Damaged Brands) and that will make the company’s recovery even more difficult.
Shares are trading down more than -4% about 90 minutes before closing today, at $4.06 in a 52-week range of $4.01-$9.42.