Nokia Oyj, the world's largest mobile phone maker, has destroyed so much shareholder value that it may be worth 52 per cent more if sold and broken into pieces.
The Espoo, Finland-based company, once worth almost $300 billion, has seen its market value tumble 77 per cent to $25.6 billion yesterday since Apple Inc introduced the iPhone in June 2007.
Including net cash, Nokia is cheaper than its 10 biggest rivals based on earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg.
By separating its mobile phone, infrastructure equipment and mapping software businesses and accounting for its patents, Nokia could be worth $39 billion, based on the valuations of comparable companies, the data show.
While Nokia cut its revenue forecast at its mobile-phone unit and may earn less this year than any time in almost two decades, sales of its assets could attract companies from Microsoft Corp to SamsungElectronics Co and HTC Corp, according to Jefferies Group Inc.
'It's a classic situation where the parts are worth more than the whole,' said Matt McCormick, a money manager at Cincinnati-based Bahl & Gaynor Inc, which oversees $3.6 billion. 'The clock is ticking. Nokia is a good brand, but it's a tired brand and they need to come up with something. They are going to be a strong candidate for a takeover.'
Laurie Armstrong, a spokeswoman for Nokia, said in an e- mail it won't comment on 'rumor or speculation.' Redmond, Washington-based Microsoft's Melissa Havel declined to comment.
Groundless
Nam Ki-yung, a spokesman for Suwon, South Korea-based Samsung, said in an e-mailed statement that speculation about an acquisition is 'groundless.' Keith Nowak, a spokesman for Taoyuan, Taiwan-based HTC, said the company couldn't comment.
Nokia this week scrapped its full-year sales and margin forecasts for handsets and services, and said revenue at the unit would fall 'substantially' short of its projected range this quarter.
The stock slumped 18 per cent to a 13-year low on May 31, exceeding the 14 per cent slide on February 11, when Nokia announced a deal to adopt Microsoft's Windows platform after determining that its own Symbian system couldn't keep up with Apple's iOS and Google Inc's Android.
Nokia's share of the smartphone market fell to 25 per cent in the first quarter of 2011, according to Stamford, Connecticut-based Gartner Inc.
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