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moneysense.ca, 14/01/09
Do you still own Nortel?
I used to own Nortel in my RRSP accounts but sold before the reverse split for about $3 per share (purchase price: $25 per share). The reason: I only owned 100 shares and a $300 investment wouldn’t have made a huge difference to my portfolio either way. But, water cooler conversations around the office today revealed that many still own NT in their portfolios. With Nortel filing for bankruptcy protection, here’s a pop quiz: Do you still own Nortel in your portfolio? If so, why?
moneysense.ca, 14/01/09
Yes, I still have it, but, I picked it up at .48 hoping for it to make an upswing. I am losing money but just may be it will go back up.
Adam
Bought at $1.72 in 2002, sold for $4.00 in 2003. Should have bought a lot more shares than I did.
Don’t own it, never have. I like it that way.
Sandy Kemsley, one of the few people to make money on Nortel, at least post bubble.
I got in to the investing game less than 3 years ago, so Nortel was already garbage by then.
Yes, I still have Nortel and my position is down > 99%. It has been worthless to me for years now and it is a relic in my portfolio from 2001 that I pay little attention to. A sale would not even cover the commissions. At this point it is just a timing thing of in terms of when I want to realize the capital loss — and definitely no net capital gains in 2008 to offset
Is there any point to sell? Is there any point to hold?
Michael – don’t sell since it won’t cover your commissions. Just let yourself get wiped out with the rest of the equity holders and then you can realize a commision free 100% capital loss to write off against this years gains, if any, and so forth.
In terms of timing, you won’t get to the end of the year before a loss isrealized on this thing.
No position in Nortel. Never had any other than index funds.
There is something I simply don’t understand about this. Why no freak out? We’re bailing out the car companies, but not Nortel. Without taking a position on the bail outs per se, how can it make sense that we bail out the car companies and not Nortel. It would seem to me that we either think losing a huge company with many tens of thousands of jobs is a big issue for the Federal and Provincial governments, or it’s not. If we’ve decided to selectively bail out failing companies, it would seem that a major high-tech global player, headquartered in Canada would be a better candidate than branch plants of failing American old-tech manufacturing companies. What am I missing?
Nope. Because I didn’t live in Canada when it was trendy/patriotic to buy it …. a fair few people in my office are talking about it today too, and own the stock.
I have never owned it directly but I probably did own it through a mutual fund at one point.
Matt: I think that part of the reason there isn’t a Nortel bail out is simply scale. You do raise an interesting question though. Maybe it is because this is a totally Canadian issue (i.e. there isn’t an American side to a bail out so there isn’t any pressure to provide a Made in Canada bail out). Or maybe it is Simply because Mike Z. didn’t ask for anything…
Regarding a bailout, some money already committed and it sounds like the Ministry of Industry is open to more down the road. http://biz.yahoo.com/iw/090114/0465977.html
Regarding a bailout, some money has already been committed and it sounds like the Ministry of Industry is open to more down the road: http://biz.yahoo.com/iw/090114/0465977.html
I have a share certificate for 7 shares due to the recently settled class action lawsuit. I could burn it, file it, or post it in my basement. Undecided. I am sure someone will open one of my file boxes in the years to come and ask what Nortel Networks was and if that share certificate has any value at that point.
On a side note, I’ve had the opportunity to work with people from Nortel and you can certainly tell why that company went down for the count. They are know-it-alls, always speak in terms of “well that’s how it was done at Nortel” and more or less, they just don’t get it. Almost like a cult. Oh yeah, they all had a ‘me first’ attitude. No wonder they never cared about their customers wants and needs.
A company that hasn’t turned a profit in 10 years doesn’t deserve a bailout because it likely won’t make money in the next 10 years.
Total waste of bail-out money.
Back in ’99 I felt like the only guy screaming “the emperor has no clothes!” Only it was “those guys have no earnings!”
Needless to say I never owned it. Much happier with Atco and BC Gas/Terasen/Kinder Morgan.
I have never owned any Nortel stocks, I didn’t buy into the hype of the dot-gone era, but like others, I unfortunately held index funds and got slaughtered there. None of the tech stocks on the TSX made any “real” money – their P/E ratios were deep into the triple digits.
Unfortunately, I did get burned really badly on the Nightmare Before Halloween because I held a number of income trusts. The income trusts made real money and threw off real money to investors in the form of distributions, so it was less likely that they were cooking the books. Of course, the government that said that they wouldn’t tinker with the income trust structure went in and totally blew it up using a few blanked out pages as their evidence of tax leakage.
I didn’t buy into the most recent commodity bubble. I didn’t hold any junior mining or junior oil & gas stocks. I have no idea which one the next “trendy” sector of the market is going to be…
I’m with the first Matt. I also have a share certificate from the class action. I kept it and I’m tempted to frame it and wait until it becomes a collector’s item.
I own 10 shares in my regular trading account, all other shares were jettisoned about 3 years ago,and when I was laid off I sold all shares in my stock purchase plan luckily too (took a smaller loss than I thought).
There is no point in selling those 10 shares, the fees are more than they are worth.
Like Matt, I have a couple of settlement certificates from the class action sitting at home. Pretty much only good to wipe my ass with. Still hold post reverse-split quantity in my RRSP which wouldn’t cover the commission to sell. No cap losses available here. Should have listened when warned holding NT was like holding your money out your car window.
I never owned any NT, but if I did, I would have sold it whenever the dividend was eliminated in june 2001.
Is there any chance the NT stock could be of value down the road (10 years or so)? If so what would need to take place in order for this to happen? Successful restructure? Company bought???…
I’ve got Nortel shares sitting there right next to Bre-X and some pre-bankruptcy (2003) Air Canada. Painful reminders that I’m not smart enough to beat the market. Plus, never invest in an unprofitable company.
Matt: I don’t know if taxpayer cash to Nortel is a good thing considering there are so few employees in Canada (around 5,000 if I recall correctly). But, I truly feel sorry for employees who were recently laid off and their severance could be frozen in bankruptcy proceedings.
Matt: In Ottawa, Nortel employees and ex-employees are everywhere and I’ve worked with many of them. I’ve found them pleasant and bright and easy to work with. I’ve never been a Nortel customer though.
DGI: If I recall correctly, even when Nortel paid a dividend, it was nominal. It never would have attracted the dividend crowd.
New 2 The Game: My understanding is equity investors are now wiped out.
MikeH: Fortunately, I never owned Bre-X (before my investing career) or Air Canada. I was fortunate to get out of AIG and E*Trade before they tanked.
Hey CC, you are correct in saying that there are many Nortel employees, but I have just had the bad luck of working with the most self-serving ones….they were all employed at the now closed Calgary operations.
[...] Capitalist asks a good question – Do you still own Nortel shares and why? (For those that don’t know, Nortel was once a high flying telecom stock – think Cisco in [...]
I still own in my RRSP acct Nortel shares that show a loss of $5540 , if sold now, I get .75 cents ..hahahahaa…the trading commission is $28.00 so to sell would add further insult to injury. I was looking at swapping the Nortel shares for $6000 I have outside the rrsp, and then sell the nortel shares at a lost and claim against income….any one has a comment if this thought of mines is idea???