Saturday, March 01, 2008
The epic undoing of Nortel
For even zen-like investors rarely ruffled by reminiscences of painful matters past, this week’s salt on the open gash we all know as Nortel Networks (TSX:NT) is a morbid spectacle. Dropping another 24%, NT has dipped into virtual penny-stockdom - if we measure by its pre-consolidation stature. Recall the 1:10 consolidation of late-2006 and Friday’s close of $8.48 tells shamefully of this once mighty stock. Not to be deceived by meaningless shuffles of the capital stock, the telling score of NT’s colossal fall from power is simply put: NT’s market cap in 2000 made up a whopping 30% of the TSX’s total domestic capitalization. If it were to have the same stature today it would be a $550-billion enterprise - a whole Exxon Mobil Corp away from the $3.7-billion market cap it currently sports. How the mighty fall.