Nokia Oyj had taken the same path that Ericsson AB had taken after the sale of its handset division of Microsoft Corp. The transaction was valued USD7.2 billion. Nokia had abandoned the handset manufacturing sector to focus more on networking equipment that generate more money.
Nokia Solutions and Networks had gained USD18 billion annual revenue. Nokia took over the company from Siemens AG last month. Its annual gain accounted for more than 90% of its sales in Europe. Yesterday, stock surged 35% which made the enterprise value of Nokia to jump 0.48 times the remaining revenue of the company. This was according to a data compiled by Bloomberg.
According to Daniel Lacalle, a senior portfolio manager at Ecofin Ltd. said, "The new Nokia isn't sexy and won't have spectacular growth, but it won't suffer from spectacular failures either. Nokia will be much more competitive as it won't waste money anymore."
Join the Conversation