More Ominous News at Nokia

by Tom Taulli | December 4, 2012 11:47 am

NokiaPromo More Ominous News at Nokia[1]To raise more cash, Nokia (NYSE:NOK[2]) has sold its headquarters building in Espoo, Finland, for $221.9 million. The company, which has about 1,800 employees, will now lease the facility.

This is the kind of thing that should concern investors. Perhaps the most notable example is the New York Times’ (NYSE:NYT[3]) sale of its office-tower headquarters back in 2009. Since then, the shares have gone from $10 to $8.

But it looks like Nokia isn’t finished with its asset sales. Consider that the company also has other real estate holdings and an extensive patent portfolio.

Despite a major partnership with Microsoft (NASDAQ:MSFT[4]) — which involves using the Windows 8 Phone operating system — Nokia has failed to get traction with its smartphone offerings. The result is that the company continues to hemorrhage cash. In fact, the bonds are now rated as junk.

It’s true that Nokia’s Lumia models are solid phones. But the company doesn’t have the marketing resources to fight rivals like Samsung and Apple (NASDAQ:AAPL[5]). Besides, these companies also benefit from extensive developer ecosystems and distribution footprints (such as retail stores).

According to a report[6] from Kantar Worldpanel ComTech, Google’s (NASDAQ:GOOG[7]) Android operating system has 53.6% of the market, and Apple’s iOS controls about 34.3%. Windows has 3.2% and Nokia’s Symbian is at a dismal 0.6%.

In other words, Nokia will need to come up with a highly innovative strategy to get any serious market share. There are no signs of it yet.

Since early September, Nokia has seen a nice rally in its stock, going from $2.38 to $3.30. But for investors looking at the long haul, it’s extremely tough to make a bullish case — especially when the company is scrambling to bolster its cash position.

Tom Taulli runs the InvestorPlace blog IPO Playbook[8], a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook[9]” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders[10].”  Follow him on Twitter at @ttaulli[11]. As of this writing, he did not hold a position in any of the aforementioned securities.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2012/07/NokiaPromo.jpg
  2. NOK: http://studio-5.financialcontent.com/investplace/quote?Symbol=NOK
  3. NYT: http://studio-5.financialcontent.com/investplace/quote?Symbol=NYT
  4. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  5. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  6. report: http://allthingsd.com/20121204/a-third-mobile-platform-theres-no-room-for-one/?reflink=ATD_yahoo_ticker
  7. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  8. IPO Playbook: http://investorplace.com/ipo-playbook/
  9. How to Create the Next Facebook: http://www.amazon.com/gp/product/1430246472/ref=s9_simh_gw_p14_d0_i1?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-3&pf_rd_r=0GRB6ZMCTYDZVNG7Q7NV&pf_rd_t=101&pf_rd_p=470938811&pf_rd_i=507846
  10. High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders: http://goo.gl/pR2F3
  11. @ttaulli: https://twitter.com/ttaulli

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