Nokia is a classic illusion
The once-dominant mobile player may look tempting at less than $5 a share, but speculation in the troubled company has not been profitable.
Why do so many people want to speculate in Nokia (NOK)? I find this phenomenon of believing that a low-dollar stock could represent great value to be one of the classic illusions of the investing game.
Put simply, Nokia is a deeply troubled company. It has restructured repeatedly. It has told us repeatedly that this iteration or that iteration of the smartphone is going to make a big difference.
Nothing has made a big difference.
Now, I don't want to be binary here. On "Squawk on the Street" I alluded to shooting Nokia like a tired horse. But that doesn't mean Nokia can't bleed ever so slightly on a relatively constant basis. Nokia may not be going out of business. But perhaps it needs to continue to go down as it bleeds share to others. Think something like Sprint Nextel (S) more than something like Eastman Kodak. Think something like Research In Motion (RIMM), not something like Nortel.
Remember, though, that this is a $16 billion company and ask yourself if it were to do a reverse 10-for-1 split whether you would want to own it.
What's going on with Nokia? I think it is a victim of what has emerged as a two-horse race between Samsung and Apple (AAPL). It's awfully hard to crack back into the lineup, particularly when there is no ecosystem similar to what Apple offers.
It is the ecosystem I keep coming back to, the universal nature of interlocking Apple pieces. It's so powerful, and I think it is going to get even more powerful if Apple develops an iTV you can speak to, or speak to a remote iPad, and it puts on what you want. You say "Mute the ads" and it mutes them. Can you imagine? Not that those of us in TV ever want that to come to pass.
What does Nokia have to fight against that? A Microsoft (MSFT) operating system that's linked to Windows 8 in some form that is irrelevant to the user? (Microsoft owns and publishes Top Stocks, an MSN Money site.)
Worse, Nokia suggested on its conference call that the Chinese operators are adopting a U.S.-carrier-style subsidy approach to new sign-ups. That bodes particularly badly for Nokia, because its phones are cheap, and there's no need to subsidize them, but there is a very big need to subsidize Apple's more expensive handsets.
To me, trying to bottom-fish in Nokia makes little sense. Ask all of the other people who have tried. They have nothing, nothing at all, to show for it. Right now, the name Nokia still stands for a company. I fear that one day soon it will stand, again, for the river it is named after. A sorry state of affairs indeed.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust, and is long AAPL.
Cramer is definitely wrong about this one. He obviously blinded by apple's success. Aren't we all ? Nokia has said that they are not relying on just one phone to do their bidding. But a whole array of phones that will make up their line up. Further more this always opportunity in the phone business to grow. Rim could still make their way out. Kodak gave up they were not beat completely. Nokia just needs to stay the course not bend to weak stock.
the rest of the year will see cramer leading his lemmings over the cliff
as sure as the sun rises..........that's his scam and he plays better than madoff
but lets give him credit for getting apple right
Getting it right when? I'll have to do some research on that. I've been in and out of Anally, Apple, Cisco, GE, Ford, Intel, Microsoft, Nokia and dozens of others over the last 20 years. Lastly Apple, about 100 to 333 and then bailed. Intel 18 to 24 and bailed. Microsoft 24 to 29 and bailed. There's no way I could stay in a fad or momentum stock after 200-300%. He may have just called the top for Apple and bottom for Nokia but let's see how the rest of the year plays out.
but lets give him credit for getting apple right
bulls make money
bears make money
blind pigs find an acorn occasionally
i don't have time to list all his gaffes but here are some you can research on your own
gold at 1900
short hpq 23
sell bac 5
short aa 8
these are just some of this idiots "rigorous" picks
he said sell BAC at 5.........almost an exact bottom
sell nokia at 4 will be the bottom
this guy is the diarrhea of commentators
Jim, not sure about this call.
Tech changes so rapidly that making any short call is almost a waste. With a giant like Nokia that has tons of patents and new stronger leadership, I cant see how NOK is not a buy at ~$4.
Parterning long term with Microsoft is without a doubt a win win strategy.
Look at the streamlined user expeirence between Xbox, Win8 and Windows phone 7. Their strategy is massive.
Both companies have some very bright people and putting them below RIMM is a joke. RIMM is toast and will go by the way of Palm as a one trick pony.
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The offering could become the second-biggest this year if underwriters exercise an option to buy more shares.
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