This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

What Went Wrong at Nortel

As any CEO will tell you, acquiring a company is only one half of the M&A battle. Integrating new staff, systems, and products can stretch even the most successful firms. If you are going on a spending spree, à la Nortel, you have to be able to deal with the consequences.

Nortel has also been heavily criticized for spreading its resources too thin, as opposed to forging leadership around a specific technology. Whereas Cisco has successfully hammered areas such as wireless LAN switching, Nortel has come under fire for its broad product portfolio.

Former Motorola (MOT) executive Mike Zafirovski was parachuted in to save Nortel in 2005, but has presided over its death throes. The CEO recently told Canadian lawmakers that the credit crunch precipitated Nortel's descent into bankruptcy protection, although the firm had been wrestling with plummeting sales well before its Chapter 11.

Zafirovski was undoubtedly dealt a difficult hand when he took over Nortel, but at least one analyst thinks that he could have played a more pragmatic game.

"He could have sold pieces of the company off earlier," said Vanessa Alvarez, also of Frost & Sullivan. "Now they are going for a firesale, but they could have got some decent value."

There have already been rumblings of discontent about Nortel's yard sale. The sell-off to Nokia Siemens Networks reportedly been opposed by a group of Nortel creditors and suppliers.

Despite its many problems, Nortel's technology still has plenty of advocates. The equipment manufacturer, for example, is the second largest supplier of Code Division Multiple Access (CDMA) infrastructure in the world, and is widely used by Verizon Wireless.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
ALU $3.36 1.51%
CSCO $26.17 1.91%
DOX $57.75 2.39%
RDWR $18.61 2.14%
AAPL $112.92 2.94%

Markets

Chart of I:DJI
DOW 16,654.77 +369.26 2.27%
S&P 500 1,987.66 +47.15 2.43%
NASDAQ 4,812.7080 +115.1720 2.45%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs