Nortel Networks on the move...

Posted Feb 7th 2007 10:30AM by Victor Schiller
Filed under: Major Movement, Bad News, Nortel Networks (NT), Options

Nortel Networks Corp. (NYSE:NT) opened today at $26.95. So far, the stock has hit a low of $26.90 and a high of $27.15. As of 9:51 this morning, NT was trading at $26.99, up $1.07 (4.09%) on extremely heavy volume.

After hitting a one year high of $33.10 on March 6, 2006, the stock worked its way down to a low of $19.00 on March 6, 2006. In a report yesterday it was disclosed that the company's CFO will be leaving. Never a good sign. S&P also downgraded the stock from a 3 STAR (out of 5) hold rating to a 2 STAR sell and stated "a difficult operating environment" as the reason. The technicals for Nortel have been have been improving lately and a good few days for tech stocks may help its stock price in the short term.

For a bearish hedged play on Nortel, I would consider a March bear-call credit spread above the $30 level.

Vic Schiller is an analyst on the move at Investors Observer. (Free Subscription)

DISCLOSURE NOTE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

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Reader Comments (Page 1 of 1)

2-07-2007 @ 2:40PM

Mark Evans said...

Nothing like cutting 2,900 jobs to boost the stock price!

2-20-2007 @ 8:45PM

bill s said...

the last time I lokked at NT it was 2.60/share what happened with the stock that now now it is over 30.00? WHAT DID i MISS

4-07-2007 @ 12:17PM

Stuart said...

A reverse-stock split. This was performed to keep it's listing. I can't remember what the ratio was, but you can look it up by looking back on the charts six to eight months. This stock is almost worthless to me, but I intend to go down with this sinking ship. My hopes are that it turns the corner and starts to rebound BEFORE it files for Chapter 11 OR maybe another company will purchase the company. Stuart

4-07-2007 @ 12:29PM

Stuart said...

Reverse stock split occurred on 12/06/06. The split was 10:1 meaning ten shares of the stock are now considered one share of stock. I hope that this helps.

Stuart