Why Nokia Corporation (ADR) (NOK) Should Just Say “No!”

Page 1 of 2

Rumors are a part of life for investors — nothing new there. For a company like Nokia Corporation (ADR) (NYSE:NOK), which is in the midst of a turnaround effort, the rumor mill always seems to work overtime. For a number of reasons, let’s hope the latest rumblings aren’t true.

Nokia Corporation (ADR) (NYSE:NOK)

Rumor has it
When Nokia Corporation (ADR) (NYSE:NOK) and Siemens AG (ADR) (NYSE:SI) amended their joint venture agreement regarding Nokia Siemens Networks, each party was able to do what they pleased with their share of the partnership. Siemens really got the market talking when it decided to actively solicit bids for its minority piece of the NSN pie.

Rumor has it Siemens AG (ADR) (NYSE:SI) has approached several private investment houses, including The Blackstone Group L.P. (NYSE:BX) and KKR & Co. L.P. (NYSE:KKR), to gauge interest in its share of NSN. It makes sense for Siemens to unload NSN as it streamlines holdings to concentrate its business lines, and now some are suggesting that Nokia may take a similar path. Hopefully, Nokia Corporation (ADR) (NYSE:NOK) will just say “no,” for a couple of reasons.

Nokia’s recent fiscal Q1 results were a pleasant surprise for many. Generating non-IFRS (Europe’s version of non-GAAP financial results) operating profitability along with positive net cash in Q1 in 2013 was a dramatic improvement compared to losses in both key metrics last year. How’d Nokia do it? The short answer is NSN. Yes, Nokia Corporation (ADR) (NYSE:NOK) benefits from a strong patent portfolio valued by some at an estimated $4 billion and producing more than $600 million in revenue annually, but its NSN’s consistent growth that brought Nokia back from the financial cliff.

Another rumor, and the reason behind Nokia’s share price briefly jumping to over $4 a share on Tuesday, was that Chinese telecom giant Huawei Technologies was interested in buying Nokia Corporation (ADR) (NYSE:NOK). All it took was a Huawei executive suggesting there would be some synergies between it and Nokia, and the rumor mill was off and running. After it was shot down, Nokia’s stock price eased, but the die’s been cast. How long before the next Nokia buyout rumor hits the streets?

Why Elop should say, “Thanks, but no thanks”
In addition to improving Nokia’s overall financial results, what NSN gives it is time: Time for high-end Lumia smartphones running Microsoft Corporation (NASDAQ:MSFT)‘s Windows phone OS to gain traction. Time is critical right now, particularly because the Microsoft/Nokia lovefest appears to be working. Windows phone is making significant progress in the domestic OS market, and that’s good for Nokia Corporation (ADR) (NYSE:NOK). Why? According to a Windows Phone developer blog, 80% of Windows phones sold globally are manufactured by Nokia, led by its flagship Lumia 920 device.

Yes, Google Inc (NASDAQ:GOOG)‘s Android and Apple Inc. (NASDAQ:AAPL)‘s iOS continue to rule the roost here in the U.S., with 51.7% and 41.4% OS market share in Q1 of this year, respectively. While Windows domestic OS market share in Q1 was a mere 5.6%, that’s up from last year’s 3.8% and indicative of a growing acceptance for the new kid on the block.

Unseating industry heavyweights like Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL) was never going to happen overnight; they’re both too established for that. But Windows Phone adoption is coming along, even growing market share faster than Android in Q1 of 2013. And Nokia Corporation (ADR) (NYSE:NOK)continues to introduce smartphones with new features and functionality, even as Apple shareholders are bemoaning its lack of innovation. Based on Apple’s stock price movement since introducing iOS 7 to developers about a week ago, it doesn’t appear shareholders are convinced the new OS is innovative enough.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!