Nortel - will they or won't they file for bankruptcy? Will they be chopped up into pieces and sold off? All the news these past few months leading to a crescendo of news yesterday stating Nortel is planning to file for bankruptcy. Certainly, all the rumors didn't help their stock any. I'm reminded of Senator Chuck Schumer (D) who released a public letter about IndyMac's viability causing a bank run by customers that led to the fall of IndyMac. So perhaps we in the media should carefully consider what we say about Nortel, one of the premiere telecommunications companies of all time. If we continue the drumbeat of Nortel headed into the fires of obvlivion we just might help march them there. Sometimes the media and bloggers are way too gleeful when a company 'titan' takes a fall.The media should always report the news of course, but I've read way too many stories about Nortel these past few weeks that is all "doom & gloom". Nortel has many technological assets, patents, and a huge customer base. Their customers aren't going to disappear overnight, but if the media keeps hammering away at Nortel's viability, it might scare their current and potential customers away from purchasing Nortel equipment. I'd just hate to see a good company die because of fear or panic caused by overblown news coverage.
This isn't to say Nortel doesn't have problems - they do. As Rich points out, "they have up to six billion dollars of debt which means they pay hundreds of millions of dollars of interest." But we should take everything in perspective. With the global slowing economy, nearly every company is hurting - even those with good technology and great products. Nortel went on a bit of spending spree acquiring companies back in the dotcom boom days and now the bill has come due.
A fascinating read by Rich Tehrani where he talks to Nortel's President of the Enterprise Solutions Division of Joel Hackney was just posted. The article is titled "Despite Reports, Nortel Operates as Usual". In the article, Rich writes, "reports are circulating that Nortel has declared bankruptcy and pieces will be sold off to foreign firms. Company sources say this is untrue. Here is the complete story." There is certainly more to the story than just 'doom & gloom' and Rich gets Nortel's perspective. Read More...
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