Nokia Takeover Seen as Collapsing Shares Signal Bottom: Real M&A
Nokia Oyj (NOK1V)’s steepest stock drop in more than a decade is turning the mobile-device maker into a potential takeover target for buyers willing to bet that it still has a future in smartphones.
Nokia plunged 18 percent yesterday after forecasting a wider second-quarter operating loss from handsets and saying it will cut as many as 10,000 jobs as it cedes market share to Apple Inc. (AAPL)’s iPhone and Samsung Electronics Co. devices. After wiping out about $100 billion in market value, Espoo, Finland- based Nokia trades at a 38 percent discount to its net assets, the least expensive on record, according to data compiled by Bloomberg dating back to 1995.
Once Europe’s most valuable company, Nokia is losing money as it tries to rebuild the smartphone business around Microsoft Corp. (MSFT)’s Windows Phone software and after failing to sell an unprofitable equipment venture with Siemens AG. (SIE) With the lowest price-sales multiple among communications-equipment makers, cash and short-term investments exceeding its $8.6 billion market value and more than 10,000 patent families, Nokia could attract Microsoft, said Falcon Point Capital LLC. It may even be cheap enough to lure buyout firms, Avian Securities LLC said.
“The key question is, can they do something to turn this into a growth business again?” Michael Mahoney, senior managing director at Falcon Point in San Francisco, said in a telephone interview. “If they can just make it grow, even a little bit, it’s very cheap.”
Doug Dawson, a spokesman at Nokia, declined to comment on speculation about a possible sale.