Nokia Sale: The Latest Summer Fiction
This column was originally published on
RealMoney
on Aug. 8 at 11:34 a.m. EDT. It's being republished as a bonus for
TheStreet.com
readers.
August is a magical media month: A time of crop circles, mutant reptiles and merger fantasies.
The recent
Research In Motion
(RIMM)
takeover rumor began circulating as the company threatened to sink below $70, and the
Cisco
(CSCO) - Get Cisco Systems, Inc. Report
-
Nokia
thesis is surfacing right after the rebound from the recent Nokia plunge is beginning to run out of steam.
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Let's be clear, Nokia is hardly going to take over RIMM now that the Symbian smartphone market is growing twice as fast as the Blackberry market. That would be akin to
Sony
buying the rights to Dreamcast, a failing video console maker, in the summer or winter of 1999. (And that is not particularly flippant, Dreamcast was selling 500,000 units a month when it debuted in America.)
The Cisco-Nokia hookup is even more bizarre. First, Nokia is in the consumer and branding business. Cisco is at the opposite end of the IT spectrum, it lacks even operator customers, let alone a consumer presence. The complete absence of overlapping areas is hardly a merger indicator. You rarely see rumors of
Coca-Cola
(KO) - Get Coca-Cola Company Report
and
Boeing
(BA) - Get Boeing Company Report
type mergers for example.
Second, there is the national security angle. Nokia makes up half of the value of the Helsinki stock exchange. It has more impact on Finland's economy than the combination of
Microsoft
(MSFT) - Get Microsoft Corporation Report
,
Intel
(INTC) - Get Intel Corporation Report
,
Apple
(AAPL) - Get Apple Inc. Report
,
Motorola
(MOT)
,
General Electric
(GE) - Get General Electric Company Report
,
3M
and
IBM
(IBM) - Get International Business Machines Corporation Report
have on the American economy.
Considering how much hyperventilation a foreign takeover of a rather mangy Illinois refrigerator company just created, what would happen if the above-mentioned U.S. companies would be merged by a Chinese buyer and renamed Seven Harbingers of Celestial Harmony? That's the closest analogy I can find to a takeover of Nokia from a Finnish perspective. And Nokia is still run by those Finnish executives who transformed the company from a low-end paper napkin specialist into a telecom company. They are hardly likely to cap their careers by selling out.
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Tero Kuittinen is a Senior Product Specialist for Nordic Partners, Inc., a pan-Nordic brokerage firm. Although Kuittinen is an employee of Nordic Partners, Inc., the statements above are being made in Kuittinen's personal capacity and are in no way are the statements of Nordic Partners, Inc., nor attributable to the company. At the time of publication, Kuittinen had no position in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Kuittinen appreciates your feedback;
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