A Nokia Share Update - Should We Have Bought Their Shares? 03/04/11
Posted by Birchills Telecom on Sun, Apr 03, 2011 @ 02:43 PM
Nokia continues to make headlines - we wonder if we should have bought their shares?
Regular readers may recall that I was off to buy some Nokia shares on the weakness caused by Mr Elop’s decisions to slag off
his own companies flag ship phone the N8 and sign an alliance with Microsoft. You can read why I thought Nokia shares were a bargain here.
I did indeed go to buy the shares on the 14th of February and I hit the American dealing regulations and I’m afraid gave up.
Since then it has emerged that:-
Steve Elop the newly appointed CEO of Nokia received a $6m golden hello. The eye watering package was paid $3.17m up front with another $3m due in October. He also got 500K to reimburse Microsoft fees and 300K to cover legal expenses. The details were given in Nokias 20F US document filing. You can read the full document here. Be warned though (although it has a nice photo of a unshaven guy with a bluetooth headset in his ear) it does run to 275 Pages.
In the same filing they say they have provided EUR449m against potential infringements for intellectual property. That is some serious money – essentially admitting that maybe they stole some intellectual property.
Nokia have half a dozen stores branded in their name but operated by mobilephonesdirect. I have to say that passing the Manchester store a few days ago that their customers seemed few and far between. (See the picture above). Many people have used such information when deciding to buy - did it appear to be a reliable indicator?
Well...On February 14th the share price was $8.84 per share and on Friday the 1st of April it was $8.35 – a price drop of around 5.5%. So I was wrong in the short term expecting a rebound and Mr Elop was right in predicting hard times ahead, at least in the short term.
Written by David Hill, Chairman, Birchills Telecom
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