Nortel: Play by Play a Week Later
October 24th, 2005 Posted in Main Page, Nortel Networks
With some time to digest all the exciting Nortel news last week, here's a play-by-play of what really went down:
June 2005:
Gary Daichendt quits as president and COO; board realizes it needs to
replace CEO Bill Owens as soon as possible; board starts CEO
search without Owens' participation.
June 29: Nortel holds seven-hour AGM; elects Harry Pearce as chair; process to hire new CEO apparently officially starts
Gary Daichendt quits as president and COO; board realizes it needs to
replace CEO Bill Owens as soon as possible; board starts CEO
search without Owens' participation.
June 29: Nortel holds seven-hour AGM; elects Harry Pearce as chair; process to hire new CEO apparently officially starts
Oct. 15: Nortel fires Owens after it
secures an employment contract with ex-Motorola COO Mike Zafirovski;
Forget about Owens “retiring” because he had no intention of leaving
soon. Owens, who had been a board member before coming CEO, announces
he will on be on the board.
secures an employment contract with ex-Motorola COO Mike Zafirovski;
Forget about Owens “retiring” because he had no intention of leaving
soon. Owens, who had been a board member before coming CEO, announces
he will on be on the board.
Oct. 16: Motorola sues Zafirovski for
breaching a non-compete clause. Nortel's recruiter claims it was aware
of the non-compete issues but didn't think they would be a major
problem. Wrong.
breaching a non-compete clause. Nortel's recruiter claims it was aware
of the non-compete issues but didn't think they would be a major
problem. Wrong.
Oct. 21: Nortel discloses Zafirovski's
sweet compensation package; makes sure his “golden days” are
comfortable by guaranteeing him a $500K a year retirement package - as
if someone whose already a multi-millionaire needs a $10 million to $15
million retirement package. Zafirovski also gets restricted stocks
units now worth $7.5 million and five million options.
sweet compensation package; makes sure his “golden days” are
comfortable by guaranteeing him a $500K a year retirement package - as
if someone whose already a multi-millionaire needs a $10 million to $15
million retirement package. Zafirovski also gets restricted stocks
units now worth $7.5 million and five million options.
Oct. 24:
All quiet on the Nortel front as Nortel, Motorola and
Zafirovski look at ways to make this “issue”
disappear. Zafirovski prepares to write large check to
Motorola; Nortel prepares to write large check to Zafirovski; Nortel
shareholders watch stock sink towards $4.
All quiet on the Nortel front as Nortel, Motorola and
Zafirovski look at ways to make this “issue”
disappear. Zafirovski prepares to write large check to
Motorola; Nortel prepares to write large check to Zafirovski; Nortel
shareholders watch stock sink towards $4.
October 25th, 2005 at 11:01 pm
great play by play… I thought I'd dialogue a the Nortel's history and call it “Introduction to Nortel 101″ for anyone considering this equity without SEC approval let alone the very auditors…
1-bad news ongoing 2-Admitted Fraud sued for $9 billion 3-2004 lowest sales since mid 1990's 4-2005 losing more earnings 5-$6.6B debt 6-cash rapidly declines at 3 billion 7-ALL gambled Ventures lose 8-BSNL lost leader 9-Noika in with Putian and NT is out 10-LG earnings decline 70% last quarter 11-analysts “hate” PEC $448M deal with $15M declining returns 12-Debt to pay February 13-Daichendt-Kunis-Deroma-Collins-Owens all SUDDENLY depart 14-Gary slandered 9-New CEO with grudge sued by ex-employer who passed him by is delayed 10-HQ firesold 11 cutting almost 70% R&D 14-firesold manufacturing that generated income with ongoing delays in payment 15- never made money/ traditionally disapointed 16-always traded at a premium/bloated 17-losing marketshare 18-business/margins decline 19-shrinking everywhere 20-they still contradict optimism/growth 21-resigned plea baragined board deny obvious red flags for bonuses they approved and received 22-visted a stoic SEC 23-SEC fines 24-majority of crooks still there “diffcult to find” 25-Stalled for a almost year and a thousand accountants in silence, then suddenly changed “dissatisfied” numbers in just 2 weeks 26-stalled to last minute under de-listing threat 27-investigation by RCMP/OSC/SEC/DOJ/FBI 28-NT fired CEO,CFO,& Ctrl. then months later fired 7 more on criminal probe 29-OSC forced bad news 30- fraud adds teeth to older lawsuits 31- restatement should be even more reliable 32-growth/profit always contradicted 33-diluting shares 34-board gets 3 yrs. to repay bonus 35-No one does busines with them anymore like Cingular, Vorizon, etc… 36-lost BT $19B tender who used everyone but NT 37-Even Canadian companies won't buy from NT like Sprint Canada, BMO 38-almost went bankrupt (most do thereafter) 39-Nortel suing ex-employees for small fraction of bonuses 40-costs still too high 41-high severence costs with more to come 42-NT used past leaders to combat Ottawa and Washington 43-interests of shareholder & employee shot, both suing them 44-criminal results not priced in 45-institutions require several successful quarters and SEC approval 46-no credibility 47-worse off now than ever 48-they shrink, peers grow 49-Too many suffered for their lies 50-always disappointed 51-insurance recinds coverage 52-Corporations hoarding cash at 1959 record levels 53-Orders unethically below cost 54-Telecom downgraded 55-only end user benefits in future IP 56-ongoing lower prices 57-Asian competition moving in 58-LU/CISCO eating their pie 59-continues contradicting hype in desperation 60-customer mergers hurt 61-No more big orders 62-measly orders EDC financed 63-Analysts see financing to zero 64-fraud finally effects customers 65-Staff de-motivated with job losses 66-bloated share due to those holding from fraud rally 67-accounting costs 68-legal fees 69-”expensive” accounting software 70-ad costs target general public to sell shares not business 71-bad reputation 72-cash flow problems 73-exports jobs for losing orders 74-20% of workforce gone 75-Q205 hid bad news 76-ambiguity in disclosures 77-cutting everything 78-supported human rights violations/enemy spys in Asia 79-restructuring has not finished 80-in a linear death spiral 81-unproven board members 82-wireless their largest area is decling 83-ruined faith in the markets 84-near 52 week lows 85-horrid outlook 86-bad fundamentals 87-poor ethics 88-no credibility 89-closing campuses 90-board gets 3 years to repay 91-high pensions to insiders 92-exhaustive “risks and uncertainties” 93-Moodys warns of insolvency 94-nothing repaired, still bonuse happy 95-endless unanticipated surprises 96-criminal charges expected 97-NT mute on Collins departure 98-Deroma legal chief retires before their bigggest lawsuit 99-post disaster Kerr stepped down before numbers finalized 100-Lawsuits consolidated in the U.S. 101-the chances of insolvency seem to increase as time progresses and events transpire