RESEARCH TRIANGLE PARK, N.C. – Mike Zafirovski repeated his confident words about turning around Nortel when he met with stockholders at the company’s annual meeting in Toronto on Thursday.

But is anybody listening?

Nortel stock gave back another 4 cents on Friday, closing at $2.24. While that’s 22 cents above the 52-week low the stock hit on June 13, it’s still far from the 52-week high of $3.57 in October of last year – just before Zafirovski took over as chief executive officer.

At the stockholder meeting, Zafirovski reiterated his faith that the new management team he has put in place will rebuild the company. He also dismissed talk of a potential sale or merger with another telecommunications firm. Speculation has increased that Nortel could be a merger or takeover target in the wake of deals between Lucent-Alcatel and Siemens-Nokia.

“I personally am not interested in selling or merging Nortel with somebody else,” Zafirovski said, according to the Canadian Press account of the meeting.

“We may have to do that at some point in time if we are not successful. But to be merging with somebody else from a position of weakness I don’t believe is what you want to do with a great global Canadian icon.”

Zafirovski met with shareholders after announcing plans to layoff a net 1,100 workers and to restructure Nortel’s pension plans.

“We can and we will be a great company again,” Zafirovski said, according to Mark Evans of the National Post. “The clear implication is we have been a great company, and we have a strong sense there is a strong foundation to be a great company again.”

After the meeting, Zafirovski and Chief Financial Officer Peter Currie met with reporters, according to The Globe and Mail of Toronto.

“We’re actively generating ideas to improve this company, and we’re implementing them progressively,” Currie said, according to the newspaper.

However, in talking with the press, Zafirovski appeared to be more open to the idea of something beyond a go-it-alone corporate strategy.

“Mr. Zafirovski expects the turnaround plan will start gaining traction somewhere between the end of this year and the middle of 2007, he told reporters,” reads The Globe and Mail account. “While optimistic about Nortel’s prospects, Mr. Zafirovski conceded that if the company fails to get back on track, it may be forced to turn to a merger.”

As far as the stock is concerned, Matt Krantz, a financial markets reporter at USA Today, wrote Friday that continuing to hold Nortel stock is a gamble.

“The discounted cash flow analysis generated by New Constructs, which estimates what the stock is worth now based on its expected future cash flow, ranks Nortel’s shares as ‘dangerous’,” Krantz said. “Since the company has lost money for so long, it’s impossible to do a full analysis of its valuation, based on its price-to-earnings ratio. And its USA TODAY Stock Meter score, which measures how aggressive the investment is, ranks Nortel as a very aggressive 4.2 on it’s scale of 1 (conservative) to 5 (aggressive).

“If you hang onto the stock, just remind yourself that you’re gambling. There’s no rational reason to expect these shares to recover anytime soon.”