What is Mike going to use to buy companies: Nortel stock, buttons, 6 sigma T shirts??! Nortel, with its debt load and low stock price, is not a buyer, its a seller. Nortel has a debt to equity ratio of 1.6, meaning it has $1.60 of debt for every dollar of equity. Cisco has debt to equity of 0.2! Nobody is lending Nortel a dime in today's market to go out and buy anybody. My translation of Mike's "financing is a challenge" is "no one will give us any money".
The Psychiatrist
· 1 year ago
Nortel's debt to equity is more like 1.4 and not 1.6 as you suggest.
Yahoo finance is a little behind the curve.
ex-nt
· 1 year ago
OK, if its 1.4, it's still too high to go shopping.
Observer
· 1 year ago
I've posted several times since last summer on this blog that Nortel or anyone else would be unable to do anything because of the roiled credit markets. This is old news people. Nortel management like most other companies is behind the curve when predicting the enormity of this crisis. And its going to get much worse before it gets better.
On the bright side, Nortel is actually in a good situation because of the breadth and depth of its businesses. In a slowing economy, breadth is what is necessary to survive a downturn.
All Comments
Yahoo finance is a little behind the curve.
On the bright side, Nortel is actually in a good situation because of the breadth and depth of its businesses. In a slowing economy, breadth is what is necessary to survive a downturn.