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Nortel Runs The Reverse (NT)

Nortel put out another set of dizzying financials today. Revenue rose 17% to $2.96 billion. The company’s loss fell slightly to $99 million. As usual, the company cannot put out a clear set of numbers. The report had “a gain…

By Douglas A. McIntyre
Published November 7, 2006, 1:00pm ET · 1 min read

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Nortel put out another set of dizzying financials today. Revenue rose 17% to $2.96 billion. The company’s loss fell slightly to $99 million. As usual, the company cannot put out a clear set of numbers. The report had “a gain of $43 million related to changes to its North American employee benefit plans; a gain of $16 million on asset sales; shareholder litigation expenses of $38 million; and restructuring charges of $25 million”.The company also said it would do a 10-for-1 reverse split. These actions always look weak. They are a sign that the company cannot get the stock price up on its own. It also takes a company off its regular spot on the “most actives” list because its trades about 20 million shares a day on the NYSE. It will be lucky to trade 2 million now. Stupid marketing and investor relations move.The argument for the reverse split is that institutions will often not buy stocks that are under $5. Until Nortel stops losing money, Big Money is not going to look at it anyway. But, hope springs eternal.Nortel’s stock is down 2% on these two pieces of news, trading at $2.25, fairly near its 52-week low. It’s a “pick em” to decide which announcement is pushing it down more.Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

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Douglas A. McIntyre

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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