Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nasdaq  >  Microsoft Corporation    MSFT

Delayed Quote. Delayed  - 07/26 06:26:19 pm
74.1456 USD   -0.06%
06:36p MICROSOFT : researchers help develop a way to transfer learning for ..
06:14p OPINION : Tech Talk: A remembrance of Microsoft Paint
06:06p AI AND CYBERCRI : Good and bad news
News SummaryMost relevantAll newsSector newsTweets

Nokia's woes might call for Microsoft aid

share with twitter share with LinkedIn share with facebook
share via e-mail
05/06/2012 | 11:04am CEST

Addressing Nokia Oyj employees in January 2011, Chief Executive Stephen Elop - at that point only four months into the job - dramatized the company's predicament by comparing it to standing on a burning platform.

Nearly a year and a half on, and with Nokia's Lumia mobile phone range failing so far to revive sales, its position still looks frail. Its shares have lost 90 percent in five years and its debt is rated junk by two of the three major ratings agencies.

Might Microsoft Corp, Elop's former employer and whose software Lumia is based on, have to step in to help Nokia out, seeing the Finnish company as a valuable point of entry into the cellphone market?

Analysts have attributed Nokia's decline in large part to its late response to Apple Inc, whose iPhone redefined the smartphone market in 2007, and some see a marriage with Microsoft as possibly a last chance to turn the group around.

For Microsoft the relationship is important, because Nokia was its first major break into the smartphone market after a decade of heavy investment. During that period other cellphone makers either chose to use their own software - as did Apple - or favored Google Inc's Android.

"If Nokia ends up in financial difficulties I believe the helping hand would be there," said Sami Sarkamies, an analyst at Nordea.

Nokia and Microsoft declined to comment.


Microsoft is already paying Nokia $1 billion a year to use its software on Lumia smartphones. And investment bankers familiar with the technology sector said the support could extend well beyond that amount, if Nokia's problems intensify.

"I don't see Microsoft owning Nokia, but it would definitely provide financing to the tune of a couple of billion dollars," said one veteran technology banker.

Any Microsoft support for Nokia would be more likely to take the form of an inter-company loan, or an equity stake, rather than a full takeover, a second banker said.

Even though Microsoft has nearly $60 billion of cash on its balance sheet, the company has traditionally steered clear of the hardware business, because it does not want to compete with the manufacturers that use its software.

Yet other priorities may override that consideration.

At the same time, some bankers said they thought Nokia, which has a market value of 9.3 billion euros ($12.2 billion), was an unlikely target for other cellphone manufacturers because of its deep integration with Microsoft.

"I don't see it as a target for private equity either. It is still too expensive and too volatile," said a third banker. "You would have to be prepared to catch a falling knife."

With a full takeover of Nokia seeming unlikely, some bankers and analysts were equally skeptical about asset spin offs as a way for the company to raise some much-needed liquidity.


Nokia is in talks to sell its British luxury subsidiary Vertu, which makes some of the world's most expensive mobile phones, a source familiar with the company's strategy told Reuters previously.

Yet Vertu is expected to generate only a few hundred million euros if it is sold to private equity firm Permira. And bankers said Goldman Sachs' mandate to sell the business did not extend to any other Nokia assets.

"Banks are pitching ideas to them like they always do, but I'm not aware of any other mandates to sell Nokia businesses or any wider mandate to advise the company on options," the first source said.

Nokia's other assets that could be of interest to potential buyers include its intellectual property portfolio, which a fourth banker described as "the best in the industry".

Yet Elop told the company's shareholders' meeting on May 3 he was not planning any wider patent sales. He also said he saw the location and mapping business, built on the $8.1 billion acquisition of U.S. firm Navteq, as a core asset the firm would aim to keep, despite some expectations it could be sold.

The fourth banker said Microsoft was likely to urge Nokia not to put its patents on the block in any case, because it would not want them to fall into the hands of Google.

The only other asset of any size that Nokia could potentially sell would be its half of Nokia Siemens Networks (NSN).

Yet its parent companies Nokia and Siemens tried to sell NSN last year to private equity, a process that collapsed over price, and there seems no obvious reason why they would be more successful now.

For Elop, there remain painful decisions to secure his legacy as head of what once ranked as one of Europe's biggest technology success stories.

"Elop was not hired as a boss for a burning platform," said John Strand, founder and CEO of Danish consultancy Strand Consult. "He put the platform on fire." ($1 = 0.7603 euros)

(Additional reporting by Tarmo Virki, Josephine Cox, Leila Abboud and Bill Rigby.; Editing by David Holmes)

By Victoria Howley

Stocks treated in this article : Apple Inc., Google Inc, Microsoft Corporation, Nokia Oyj, Siemens AG
share with twitter share with LinkedIn share with facebook
share via e-mail
06:36p MICROSOFT : researchers help develop a way to transfer learning for machine read..
06:14p OPINION : Tech Talk: A remembrance of Microsoft Paint
06:06p AI AND CYBERCRIME : Good and bad news
05:36p ANNOUNCING AZURE CONTAINER INSTANCES : Fastest and easiest way to run a containe..
05:17p MICROSOFT : Legislators want four to testify in deepening probe of Gear Up
04:27p MICROSOFT : releases new repair kit for Surface Laptops
04:27p MICROSOFT : pledges to keep Paint after outpouring of support by fans
04:15p MICROSOFT : Launch Of Strategic Sourcing Advisors Redefines Mid-Size Contact Cen..
12:43p MICROSOFT : Sunrise Technologies Achieves the 2017/2018 Inner Circle for Microso..
12:43p MICROSOFT : offers a free assessment of your enterprise`s GDPR readiness
More news
News from SeekingAlpha
11:55a Microsoft announces cloud container tool to take on Google
09:52a ALPHABET'S Q2 : What Was Said, And Also Not Said, Make It Exciting
09:00a RETIREMENT STRATEGY : Beauty Is In The Eye Of The Beholder
07/25 Mercury General In The Garden Portfolio
07/25 Despite The Dominance, Don't Get Too Comfortable With Big Tech Stocks
Financials ($)
Sales 2018 104 641 M
EBIT 2018 31 249 M
Net income 2018 22 229 M
Finance 2018 9 501 M
Yield 2018 2,27%
P/E ratio 2018 25,10
P/E ratio 2019 20,72
EV / Sales 2018 5,38x
EV / Sales 2019 4,79x
Capitalization 572 785 M
Duration : Period :
Microsoft Corporation Technical Analysis Chart | MSFT | US5949181045 | 4-Traders
Technical analysis trends MICROSOFT CORPORATION
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 37
Average target price 79,1 $
Spread / Average Target 6,6%
EPS Revisions
Satya Nadella Chief Executive Officer & Non-Independent Director
Bradford L. Smith President & Chief Legal Officer
John Wendell Thompson Independent Chairman
Jean-Philippe Courtois President-Global Sales, Marketing & Operations
Amy E. Hood Chief Financial Officer & Executive Vice President
Sector and Competitors
1st jan.Capitalization (M$)
RED HAT INC43.36%17 732
HEXAGON21.63%16 528
CITRIX SYSTEMS15.01%12 362
SYNOPSYS, INC.29.80%11 484