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 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.

Sponsored: Want to Retire Early? Here’s a Great First Step

Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?

Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.