WRAL Tech Wire

How low, low the mighty have fallen – Nortel now faces NYSE delisting

RESEARCH TRIANGLE PARK, N.C. — Nortel may still be the top telecom equipment maker in North America, but it is far from the financial giant it used to be. The latest blow in its financial free-fall came Thursday, when Nortel received a delisting warning from the New York Stock Exchange.

Its shares closed unchanged at 40 cents. Friday, shares dropped 2 cents. That's no 38 special. (By the way, the all-time low for the stock came earlier this week - 37 cents. What else can you buy for a quarter, a dime and two pennies?)

Want perspective on how steep the fall for Nortel has been? Brett Hill of the Ottawa Citizen points out: “Its all-time high is $1,231, reached on July 26, 2000, during the high-tech boom, adjusted to account for the 10-to-1 stock consolidation that's happened since then.”

The delisting news comes as one Wall Street analyst has said the stock is headed toward zero and shortly after news reports surfaced that Nortel (NYSE: NT) is contemplating bankruptcy.

In its response to the NYSE warning Thursday, Nortel hinted at another reverse stock split as a means of improving share value and get it back above the NYSE minimum of $1.

Just two years ago, Nortel did a 10-for-1 reverse maneuver that for a while boosted shares above $20 and cut outstanding shares to some 400 million from more than 4 billion.

“Nortel will notify the NYSE within the required 10-business-day period that it intends to cure the deficiency,” the company said in a statement. “If the average closing price does not sufficiently improve, Nortel may consider presenting a proposal to its shareholders for a consolidation of its outstanding common shares at its annual meeting planned for spring 2009.”

However, many people are beginning to wonder if the company will even exist in its present form by the time the snow and ice thaw around Nortel’s Canadian headquarters.

The Skinny

WRAL Local Tech Wire Publisher and Editor Rick Smith dishes out tidbits from the local technology sector. Read more articles…