Nortel Insider – by Desk Jockey

The view from one Desk Jockey

NYSE threatens Nortel with delisting

with one comment

monopoly-stock-exchangeWith NT having traded below $1.00 per share for the past consecutive 30 trading days, the NYSE has exercised its right to notify Nortel of its obligation to meet exchange minimum standards for continued listing.  What this means is that Nortel has 10 business days to notify the NYSE of how it plans to solve this dilemma and ultimately six months to bring its average share price back above the $1.00 minimum.

This could not have come at a worse time.  With news of the bankruptcy exploration options fresh in people’s minds, it seems as though the endless stream of bad news will never end.  As it doesn’t seem that NT will make it back above $1 due to shareholder confidence, Nortel is left with one option if they wish to avoid a delisting: Another reverse split.

The last reverse split was made shortly after Mike Z. took command, and its move heralded a new age at Nortel.  With the 3-5 year plan, things were supposed to get better and the reverse split, approved by shareholders, was meant to be a signal that Nortel meant business and intended to maintain shareholders’ trust.  

But yet here we are a few years later with management seriously considering bankruptcy, with their only defence that “no filing is imminent”.  Even if shareholder did approve another 10-1 reverse split, this would only bring NT up to the $4-5 range, given current prices.  How long would this last for? Just three months ago, NT was above the $5 mark.  Furthermore, with a stock consolidation like this, the number of outstanding shares would fall from ~500 million to 50 million.  We are not sure what sort of minimums the NYSE has on the number of shares either and whether this will affect any decision to call for a reverse split.

If things continue as they are, NT will be relegated to an OTC stock.


Written by Desk Jockey

December 11, 2008 at 7:11 pm

Posted in Uncategorized

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  1. […] Nortel has faced during the past week, including the very real possibility of bankruptcy and an NYSE delisting notice, it’s perhaps no surprise that some are wondering (and perhaps hoping) that Nortel will […]

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