On July 26, 2000, its shares were trading for as much as $124.50. That’s equivalent, on a split-adjusted basis, to $1,245 in today’s market.
So Friday’s $6.71 closing price equates to a loss of 99.5 per cent of the company’s market value in less than eight years. Where its market worth was once close to $400 billion, it is now less than $3 billion.
I was leaving Nortel back in December 1999, and I managed to sell my stock at that market high. But then a while later Nortel stock was down to US $20 per share, and I told my wife that it couldn’t possibly go lower than that, so we bought some. Which of course has turned out to be a HUGE mistake. Luckily we didn’t buy that much.
Wow! Stock value down 99.5% in less that eight years. As a management team, how would you like to have that on your resume? And yet the management at Nortel have seemed to make out incredibly well.
In sports when things aren’t going well, they always fire the coach. At Nortel, they fire the players and give the coach a bonus. So what happens when there are no players left?
Remember the days when management actually owed a fiduciary duty to shareholders, instead of themselves?
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