Emerging market investors can be excused if they don't remember
Novell Inc. or Wang Computers, once prominent in the world of
technology.
[caption id="attachment_60865" align="alignright" width="300"
caption="The Samsung Galaxy 3 is trouncing the Nokia Lumia 900"]
[/caption]
It's also understandable if emerging market investors who own
shares of Alcatel-Lucent (
ALU
,
quote
), like those owning Nokia Corporation (
NOK
,
quote
) rather than Samsung (
SSNLF
,
quote
), wish to forget issuing the buy order with their broker.
Novell was a hot name in technology before its revenues
collapsed, taking its share price down until it was acquired
for $6.10 a share by Attachmate Corporation in November 2010.
Like Nokia Corporation, Novell was partnered up with Microsoft
Corporation (
MSFT
,
quote
). Wang Computers could not find a buyer and filed for bankruptcy
in 1992.
Alcatel-Lucent,
another tech train-wreck in the mobile industry
, is now under $1.50 a share. Over the last five years,
Alcatel-Lucent was once close to $15 a share. It was just
downgraded on April 30, 2012 by RBC Capital Markets with a
target price of $1 a share.
Samsung has put Nokia Corporation on track to the same fate.
While
Samsung just replaced Nokia Corporation as the biggest seller
of mobile phones in the world
, reports are already out that
bankruptcy is imminent for Nokia Corporation.
Samsung has put Nokia Corporation in a position where no one
would want to take over a company like Attachmate Corporation did
with Novell. At best, a private equity or hedge fund company
might purchase the company and sell it piece by piece. But
that has not yet happened and probably won't until after a
bankruptcy filing.
Both Eastman Kodak and American Airlines tried to sell assets
but potential buyers waited until after the companies collapsed
into bankruptcy so the prices would fall. Private equity groups and
hedge funds are not known for mercy or charity.
Competition from Samsung has Nokia close to filing Chapter
11, as the trajectory of the stock manifests. Year to date, the
share price has fallen by 36.10%. Over the past 52 weeks for Nokia,
it is down more than 60%.
The contrast between Nokia and Samsung could not be more
stark.
All about the new Samsung Galaxy S III
Samsung is posting record earnings while Nokia's fall short of
Wall Street expectations. New products from Samsung like the Galaxy
series are doing well while the Lumia series from Nokia has been
one costly disappointment after another, in every meaning of the
word.
When Samsung recently issued bonds, the rates paid were lower
than South Korean Government debt. The bonds from Nokia have a junk
rating.
Wang Computers, Alcatel-Lucent or Novell: at this point, the
best that Nokia shareholders can hope for is a low single digit
share price.
