Wednesday, December 10, 2008
Chapter 10, in Which Nortel Mulls Chapter 11
A few weeks back, RBC Capital Markets analyst Mark Sue warned that Nortel is facing a very bleak future. “Considering the worsening macro environment, Nortel’s challenged industry position, and concerns related to liquidity while the capital markets are basically closed, we think bankruptcy is a distinct possibility down the road,” Sue wrote in a note to investors. Looks like Sue was right, and the road to which he referred was a short one.
Looks like Sprint is going to keep Nextel after all. Seems it views Nextel’s iDen walkie-talkie network as “a key differentiator” against rivals and plans to aggressively rejuvenate it. Never mind that Nextel might fetch as much as $5 billion that could be used in the company’s market share battle with Verizon Wireless and AT&T. Never mind that it has been hemorrhaging customers even faster than Sprint, adding to the company’s financial woes. Never mind that Sprint CEO Dan Hesse earlier this month said an iDEN sale was a possibility, telling reporters that “everything is on the table.”
