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Telecom & Wireless

As Nortel Turns The Corner, Can It Stay Independent?

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By Douglas A. McIntyre Published
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Stocks:  (MOT)(ALU)(NT)(CSCO)

Very few investors remember that Nortal traded for over $800 (split adjusted) in 2000. The shares are now at $26, a modest recovery from recently lows.

The press is beginning to pin the "recovery story" label on Nortel. Barron’s ran a cover story of the company’s emerging potential. Forbes recently wrote "Has Nortel Turned Around?" In the Forbes story, Nortel’s CEO, a former Motorola executive, said that the company is looking for acquisitions. It is an ironic comment, since Nortel should be on shoppping lists for several other companies

Nortel’s sales are over $10 billion. That makes it more than half the size of the recently merged Lucent/Alacatel. Nortel’s market cap to sales ratio is low at about one times, lower that Lucent/Alcatel and Motorola. And, if the company is turning around, it stock has not caught up. It trades well below its 52-week high of $34.30.

There are several companies that might find Nortel and attractive acquiisition. The list would be lead by Motorola, Cisco, and Lucent/Alcatel.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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