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paolo.franzoi 12/5/2012 | 4:06:58 AM
re: Nortel Takes $2.5B Hit
Means their shares are worth $3.

After the attorney fees, they might receive $100 out of the settlement. Have to remember that Class Action Lawsuits (in general) are there to provide the Lawyers with money not the victims. If you can get a big enough "class" it is all gravy.

seven
vk_lite 12/5/2012 | 4:06:58 AM
re: Nortel Takes $2.5B Hit So what does this mean to the average shareholder.
Let's say Mr. Blind-Sighted (Mr. B-S) bought 10000 shares a week or a month before the accounting scandals were revealed, at say $6US a share, and now they hover around $3US, and Mr.B-S still holds them, what does this settlement mean for Mr. B-S (assuming they actually go through with this..)?
Metropolitian 12/5/2012 | 4:06:56 AM
re: Nortel Takes $2.5B Hit The proposed settlement is quite unfair to all shareholders. Only 575 million is in cash, which the lawyers will devour promptly. The remainder of the settlement is in Nortel shares (628 million of them), which is of no interest to lawyers (or savy investors) There is about 6.33 billion shares outstanding. This settlement will dilute the value of all existing shares by 9%. This only compounds their ridicously high "dot.com era" PE. Nortel currently has at 500. The settlement will drive the PE to 550.

ironman 12/5/2012 | 4:06:55 AM
re: Nortel Takes $2.5B Hit As a NorTel share suffer, what does this mean to me/us? Does the suit settlement apply to me? It's been so long that I forget if I was part of this settlement. Obviously if I'm not part of the suit it doesn't apply, so how would one know, wait for the mail?

IM
valleyguy 12/5/2012 | 4:06:54 AM
re: Nortel Takes $2.5B Hit When does Nortel close its doors like the countless, stupid little companies trying to get bought by them? They have got to be close to running out of cash, they've done nothing to get into any growth markets, what's his face from Cisco left after three months, chronic management exodus, their stock is in the tank, etc. When does the misery end? It's like watching one of those old Japanese monster flicks, where the thing just flops around, crushing things in its wake, getting shot, burned, hacked, hammered, lurching towards certain death. Them and Lucent both. Ridiculous and tedious. Is any of their misery even newsworthy anymore?
fsubob 12/5/2012 | 4:06:49 AM
re: Nortel Takes $2.5B Hit valley guy are you that stupid. they will be profitable in 2005, will be profitable in 2006. they have made key acquisions, signed strategic agreement with varies manufactures, new worldclass executives running the company. What are you smoking thnking they will go out of business. check there financials, they have nearly $4B cash
fiberous 12/5/2012 | 4:06:42 AM
re: Nortel Takes $2.5B Hit Valleyguy,

There is the Canadian Pride and the Northern
Bell Labs that can come against this fabulous
idea.

How can you even think like this of our
neighbors primary telecom vendor?
Tsk, tsk, where is your sense of naftaism? ;)
fiberous 12/5/2012 | 4:06:42 AM
re: Nortel Takes $2.5B Hit Dear fsubob,

I am amazed at your insight. You are
the only one who has such an uncanny perception!
You must be a VC or one who will finally start
helping them. It is in your destiny given your
knowledge.

They exited 2004 with 4B cash, but took reserves
against this for 1.6B Cash outflow for 2005 and
1.8B in Cash Outflow for 2006 for commitement in
2004. They have been posting operating loss. So,
do the math and figure out how long their
father's assets are going to last.
Especially, as they go into a spending splurge.
Finally, as the headline says "Nortel takes
$2.5 hit."
Is it Canadian pride speaking? Or the cold there?
You better move to the Valley quickly to avoid
permanent damage.
optiplayer 12/5/2012 | 4:06:39 AM
re: Nortel Takes $2.5B Hit While Nortel is by no means completely out of the woods when it comes to liquidity they do appear to have sufficient resources to pay down their near term debt obligations and the proposed $575M cash settlement. Of equal importance, they have returned to having positive operating profit which is the key if they are ever going to achieve a solid turn-around. They also appear to have added some management strength which bodes well for the future though the outlook on current products is mixed at best.

The headline sighted by "fiberous" is misleading as ~80% of the $2.5B hit is in stock. It is massively dilutive to current shareholders but it doesn't impact the liquidity picture.
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