Linked by Thom Holwerda on Tue 24th Sep 2013 11:44 UTC
PDAs, Cellphones, Wireless

Finland is boiling with rage this weekend over the $25 M bonus payment the CEO Stephen Elop is set to receive as he leaves Nokia after his two-year tenure. Questions are now being raised by the oddest aspect of the bonus: the board of Nokia seems to have given Elop a $25 M incentive to sell the handset unit cheaply to Microsoft way back in in 2010. This effectively means that the board hired a man who was given a giant carrot to drive down Nokia's overall valuation and phone volumes while preparing a sale to Microsoft. What could possibly be a reason to structure Elop's original contract in this manner? Did the board in fact end up promising Elop more compensation in case he sells the phone division than if he runs it with modest success?

Vindication. We were right all along.

Order by: Score:
Criminal?
by christian on Tue 24th Sep 2013 12:01 UTC
christian
Member since:
2005-07-06

I fail to see how any of this is legal. I hope Nokia share holders block the sale (if they can) and/or a criminal investigation for espionage started.

Of course, IANAL etc.

Edited 2013-09-24 12:02 UTC

Reply Score: 19

RE: Criminal?
by Morgan on Tue 24th Sep 2013 12:10 UTC in reply to "Criminal?"
Morgan Member since:
2005-06-29

It's certainly grounds for an investigation here in the States, but I don't know a thing about Finnish law. I also hope they block it, if nothing else just to see a chance of Nokia escaping from the Windows Phone lock-in and start making innovative phones again. I like WP as an OS, but I always thought Nokia was too good for such an exclusive partnership.

Reply Score: 10

v RE[2]: Criminal?
by lucas_maximus on Tue 24th Sep 2013 19:33 UTC in reply to "RE: Criminal?"
RE[3]: Criminal?
by Morgan on Tue 24th Sep 2013 20:22 UTC in reply to "RE[2]: Criminal?"
Morgan Member since:
2005-06-29

Are you a lawyer? Do you have a law degree?


No, but I worked in law enforcement for over 14 years, many of those alongside criminal investigators and district attorneys who have handled similar cases (granted, not on the same scale here in Atlanta).

Do YOU have a law degree? If not, then who are you to call me out for having an opinion about something?

Because tbh, I don't think your expertise extends to that field.


Because you know me so well, right? Don't be a dick.

Reply Score: 10

RE[4]: Criminal?
by lucas_maximus on Wed 25th Sep 2013 05:25 UTC in reply to "RE[3]: Criminal?"
lucas_maximus Member since:
2009-08-18

I've heard you mention what you did before, it isn't the same thing.

Reply Score: 3

RE[5]: Criminal?
by Morgan on Wed 25th Sep 2013 14:12 UTC in reply to "RE[4]: Criminal?"
Morgan Member since:
2005-06-29

And once again, I never claimed it was. But you haven't answered my question: Are you a lawyer practicing in the US? If so, feel free to tell me my experiences related to US law don't apply. If not, well you're just making an even bigger fool of yourself.

Reply Score: 2

RE[6]: Criminal?
by lucas_maximus on Thu 26th Sep 2013 18:36 UTC in reply to "RE[5]: Criminal?"
lucas_maximus Member since:
2009-08-18

What your argument you've just made, would be the same as saying that that I know gambling because I sit near traders (setting odds for sport bets).

I don't see what the problem is that he was given a job to do by the board and he worked with people that he already worked with before (and had experience with working with them) to ensure a deal.

The last place I worked at Microsoft gave us a deal of 90% off all prices and $5 million quids worth of Software Licenses and we let them muck about with some expensive boats ... I will scratch your back, I will scratch your back is normal in business.

Reply Score: 3

RE[7]: Criminal?
by Morgan on Thu 26th Sep 2013 18:46 UTC in reply to "RE[6]: Criminal?"
Morgan Member since:
2005-06-29

What your argument you've just made, would be the same as saying that that I know gambling because I sit near traders (setting odds for sport bets).


It's not the same thing at all; once again you make assumptions and build a flawed argument around those assumptions. I didn't "sit near" investigators, I worked directly with them, helping them build case files against defendants. I dealt with evidence and chain of custody, and went to court to present evidence. I wasn't just a terminal operator for all fourteen years of my career in law enforcement; I've been everything from a jailer, to dispatcher, warrant clerk, evidence technician, I've worked in the Criminal Investigations and Juvenile Criminal Investigations divisions, and yes, even a lowly terminal operator.

You don't know a damn thing about me so you make something up in your head and continue to make a fool of yourself. I really don't understand that kind of behavior.

Reply Score: 1

RE[3]: Criminal?
by Radio on Tue 24th Sep 2013 20:36 UTC in reply to "RE[2]: Criminal?"
Radio Member since:
2009-06-20

You got pwned there mate.

Reply Score: 0

RE[3]: Criminal?
by phoenix on Tue 24th Sep 2013 22:21 UTC in reply to "RE[2]: Criminal?"
phoenix Member since:
2005-07-11

Are you a lawyer? Do you have a law degree?


Did you even read the first sentence of his post? You know the part that says "I know nothing about Finnish law".

Me thinks one doth protest too much.

Reply Score: 2

RE[4]: Criminal?
by lucas_maximus on Thu 26th Sep 2013 18:37 UTC in reply to "RE[3]: Criminal?"
lucas_maximus Member since:
2009-08-18

It was the "defintely something iffy" sentence, that got my attention.

Reply Score: 2

RE: Criminal?
by kwan_e on Tue 24th Sep 2013 12:23 UTC in reply to "Criminal?"
kwan_e Member since:
2007-02-18

I think the whole parachute-in-a-CEO practice should be made illegal.

Elop reminds me of Reacher Gilt in Going Postal.

Reply Score: 6

RE[2]: Criminal?
by ml2mst on Tue 24th Sep 2013 14:32 UTC in reply to "RE: Criminal?"
ml2mst Member since:
2005-08-27

Elop reminds me of a Dutch TV show, it's called "Who Is The Mole?"
https://en.wikipedia.org/wiki/Wie_is..._de_Mol%3F

Edit: link addet

Edited 2013-09-24 14:36 UTC

Reply Score: 3

RE: Criminal?
by lucas_maximus on Tue 24th Sep 2013 19:17 UTC in reply to "Criminal?"
lucas_maximus Member since:
2009-08-18

I fail to see how any of this is legal


This post and the original article linked would have been called libel in my home country and you would be taken to court.

So you are somewhat right.

Edited 2013-09-24 19:18 UTC

Reply Score: 2

RE[2]: Criminal?
by Radio on Tue 24th Sep 2013 19:33 UTC in reply to "RE: Criminal?"
Radio Member since:
2009-06-20

Wrong. The legal definition of libel is very restricted. As Thom and others genuinely think Elop was not acting in Nokia's best interests and have reasonable grounds to argue so, their opinion cannot be qualified as libel.

Reply Score: 3

RE[3]: Criminal?
by lucas_maximus on Tue 24th Sep 2013 19:35 UTC in reply to "RE[2]: Criminal?"
lucas_maximus Member since:
2009-08-18

Wrong. The legal definition of libel is very restricted. As Thom and others genuinely think Elop was not acting in Nokia's best interests and have reasonable grounds to argue so, their opinion cannot be qualified as libel.


It depends what you think reasonable grounds is, doesn't it?

It is accusing the man of industrial espionage, with no proof. I don't think that is reasonable.

The share price was in decline well before he was hired and I said somewhere else on this thread that I don't believe rome can be built in a day, so it took a while for him to do his job and get stuff sorted.

https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=max...

The share price reached a low and then climbed. You can debate whether this was because of Elop, but it has climbed since last year and is recovering.

But saying he definitely did it and it was obvious, I don't think is fair or reasonable.

Edited 2013-09-24 19:45 UTC

Reply Score: 1

RE[4]: Criminal?
by Radio on Tue 24th Sep 2013 20:22 UTC in reply to "RE[3]: Criminal?"
Radio Member since:
2009-06-20

The share price was in decline well before he was hired

Eh, yeah, that was the 2008 financial crisis. Duh.

The share price reached a low and then climbed. You can debate whether this was because of Elop, but it has climbed since last year and is recovering
Then why are they selling?

Reply Score: 1

v Comment by Nelson
by Nelson on Tue 24th Sep 2013 12:24 UTC
RE: Comment by Nelson
by Radio on Tue 24th Sep 2013 12:42 UTC in reply to "Comment by Nelson"
Radio Member since:
2009-06-20

You know how to leave a company flush with cash? Sell all assets, fire everybody, and voilĂ !

This is not how you run a company.

This simpleton view of how companies work is all too common here.
I really wonder how we managed to have economic growth before, when CEO weren't rewarded with golden parachutes - a novel "natural rule of how companies work" which started only in the 80s.

Reply Score: 6

RE[2]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 13:51 UTC in reply to "RE: Comment by Nelson"
Nelson Member since:
2005-11-29

But they didn't sell off all assets or fire everybody. What the fuck are you talking about. You don't get to make things up.

Reply Score: 1

RE[3]: Comment by Nelson
by missingxtension on Tue 24th Sep 2013 14:03 UTC in reply to "RE[2]: Comment by Nelson"
missingxtension Member since:
2011-01-14

So who gets to make things up?

Reply Score: 1

RE[4]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 14:09 UTC in reply to "RE[3]: Comment by Nelson"
Nelson Member since:
2005-11-29

Is this an actual question? Nobody.

Reply Score: 3

RE[3]: Comment by Nelson
by Radio on Tue 24th Sep 2013 14:34 UTC in reply to "RE[2]: Comment by Nelson"
Radio Member since:
2009-06-20
RE[4]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 15:25 UTC in reply to "RE[3]: Comment by Nelson"
Nelson Member since:
2005-11-29

So they didn't sell all assets and didn't fire all employees. Thanks. The only fool here is you.

Reply Score: 0

RE[5]: Comment by Nelson
by BushLin on Wed 25th Sep 2013 21:47 UTC in reply to "RE[4]: Comment by Nelson"
BushLin Member since:
2011-01-26

Wow Nelson, that's an impressive neck you have there.

Did you think two clicks was too much effort for us all?

Reply Score: 0

RE[3]: Comment by Nelson
by M.Onty on Tue 24th Sep 2013 16:07 UTC in reply to "RE[2]: Comment by Nelson"
M.Onty Member since:
2009-10-23

He's clearly saying that leaving a company flush with cash isn't necessarily difficult or good for the company. He presents an extreme but not uncommon example to demonstrate why.

Reply Score: 3

RE[4]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 17:06 UTC in reply to "RE[3]: Comment by Nelson"
Nelson Member since:
2005-11-29

He presents an extreme and factually inaccurate, made up, completely fabricated, dream of his. That's what he does.

Reply Score: 3

RE: Comment by Nelson
by hamster on Tue 24th Sep 2013 12:58 UTC in reply to "Comment by Nelson"
hamster Member since:
2006-10-06


But of course, the small minds here are allergic to common sense and don't own any Nokia stock, never shorted any Nokia stock, and couldn't predict what the weather will be like tomorrow let alone the state of a company like Nokia. You have people who judge the company based off of the results of one division, and say its going to die.


If it's your kind of commen sence where should look at number out of context then i think you are correct about people being allergic.

Reply Score: 4

RE[2]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 17:07 UTC in reply to "RE: Comment by Nelson"
Nelson Member since:
2005-11-29

Why don't you give my numbers context then, genius? Otherwise keep spinning on your wheel.

Reply Score: 3

RE[3]: Comment by Nelson
by hamster on Tue 24th Sep 2013 17:53 UTC in reply to "RE[2]: Comment by Nelson"
hamster Member since:
2006-10-06

Why don't you give my numbers context then, genius? Otherwise keep spinning on your wheel.


There are absolutly no reason for you to talk down to me like that. I will try to refrain from sinking to your favorit level.

If you want to deliver numbers to sustain your 'arguements' it would be easier to take you serious if you used context. You know like when you say they increased sales by X%... Oh yay thats big. If i sell one phone today and sell 2 tomorrow guess what... i increaed my sales with a 100% aswell. Impressiv not really but when taken out of context it does seem quite impressiv...

Or when you talk about YoY or QoQ sales how to their sales compare against the marked? Are they eating away of the competion or are they actually loosing markedshare? Numbers without context is just like Microsoft shills useless...

Reply Score: 9

RE[4]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 18:41 UTC in reply to "RE[3]: Comment by Nelson"
Nelson Member since:
2005-11-29

Okay we're not talking selling one phone one day or two tomorrow, we're talking increasing volume by over a million (two million from Q1 to Q2) in three months.

Reply Score: 3

RE[5]: Comment by Nelson
by Radio on Tue 24th Sep 2013 20:16 UTC in reply to "RE[4]: Comment by Nelson"
Radio Member since:
2009-06-20

If Lumias are so successful and growing fast, then why did Nokia sell it?

Edited 2013-09-24 20:25 UTC

Reply Score: 1

RE[6]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 21:20 UTC in reply to "RE[5]: Comment by Nelson"
Nelson Member since:
2005-11-29

Because Microsoft offered them financial reward and absorbed the downside. They keep the billions they got, don't have to pay MSFT royalties, instantly rid themselves of all debt, and have cash to invest into NSN and AT.

Plus they get to sue Android OEMs while not being able to be countersued. Their patent arsenal is worth billions.

In a risk/reward calculation Nokia kept only the upside.

Reply Score: 3

RE[5]: Comment by Nelson
by phoenix on Tue 24th Sep 2013 22:27 UTC in reply to "RE[4]: Comment by Nelson"
phoenix Member since:
2005-07-11

http://communities-dominate.blogs.com/.a/6a00e0097e337c883301774317...

Interesting graph. Haven't followed all the links to verify if it's true, but it's certainly interesting to look at. ;)

Reply Score: 1

RE[5]: Comment by Nelson
by hamster on Wed 25th Sep 2013 07:18 UTC in reply to "RE[4]: Comment by Nelson"
hamster Member since:
2006-10-06

Okay we're not talking selling one phone one day or two tomorrow, we're talking increasing volume by over a million (two million from Q1 to Q2) in three months.


Am i mistaken when i say that if i sell 1 phone q1 and 2 phones in q2 that would be a 100% increase and if i sold 1 million phones q1 and 2 million q2 that would be 100% increase?

Reply Score: 1

RE[4]: Comment by Nelson
by lucas_maximus on Tue 24th Sep 2013 19:50 UTC in reply to "RE[3]: Comment by Nelson"
lucas_maximus Member since:
2009-08-18

You got pwned there mate. The spinning the wheel comment was just golden.

Edited 2013-09-24 19:59 UTC

Reply Score: 1

RE: Comment by Nelson
by kwan_e on Tue 24th Sep 2013 13:12 UTC in reply to "Comment by Nelson"
kwan_e Member since:
2007-02-18

Considering his compensation is tied to stock options, lowballing the stock (which he hasn't done, or he would've sold it when it was less than $4 a share) wouldn't make sense financially for him.
.
.
.
CEOs have golden parachutes. Who knew. This simpleton view of how companies work is all too common here. I'm glad I ignored the endless piles of bullshit here and loaded up on Nokia stock while it was low, made a nice return.


But it was low enough for you to buy some...

There was no specific clause in his contract that said "Sell to Microsoft and get $25 million". It merely treats an acquisition the same as being let go from the company compensation wise, a much less serious offense.


So everything ever written is always written exactly as the intention?

lowballing the stock wouldn't make sense financially for him.
.
.
.
The Nokia board could've fired him Sept 4th and he'd still get $25 million.


Do you have short term memory loss within the time span of you writing a comment?

Market cap is a fickle thing, it was $14 billion prior to the announcement of the deal, its $20 billion now. Setting Nokia up on firm ground and leaving them with nothing but upside is the opposite of killing the company.


What was the market cap before Elop?

Reply Score: 3

v RE[2]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 13:49 UTC in reply to "RE: Comment by Nelson"
RE[2]: Comment by Nelson
by tylerdurden on Tue 24th Sep 2013 16:51 UTC in reply to "RE: Comment by Nelson"
tylerdurden Member since:
2009-03-17



What was the market cap before Elop?


It was around 56ish Billion, now it's around 24ish Billion.

Reply Score: 8

RE: Comment by Nelson
by galvanash on Tue 24th Sep 2013 14:03 UTC in reply to "Comment by Nelson"
galvanash Member since:
2006-01-25

I'm glad I ignored the endless piles of bullshit here and loaded up on Nokia stock while it was low, made a nice return.


But of course, the small minds here are allergic to common sense and don't own any Nokia stock, never shorted any Nokia stock...


Um, maybe because this isn't an investment forum? If your argument is and has always been ultimately about market performance, why didn't you just say so like months and months ago? You would have gotten a lot less heated arguments over your opinions, because frankly very few people here care one wit about Nokia's stock price...

I for one would not have argued that what Elop did wouldn't net a modest return for share holders - my problem with it is they dismantled a once great company without ever really even trying to compete on their own terms.

Everyone is having some fun right now at the expense of BlackBerry because they failed miserably. They did, they took too long and they delivered too little - but at least they went out on their own sword, not with someone else's dagger in their back.

From a purely financial perspective I actually think that Nokia may well have gone the right route - there is a very good chance they would have failed badly and ended up in far worse shape than they are in now. But then again I don't have stock in Nokia, so I don't much care.

If you think most of the opinions on this forum are about stock market performance your really missing the forest through the trees...

Reply Score: 11

v RE[2]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 14:15 UTC in reply to "RE: Comment by Nelson"
RE[3]: Comment by Nelson
by Radio on Tue 24th Sep 2013 15:06 UTC in reply to "RE[2]: Comment by Nelson"
Radio Member since:
2009-06-20

I didn't let the obsession some of you had with Android, MeeGo, or (even more laughably) Symbian cloud my judgment.

OSnews.

OS News.

OS. News.

Operating System News.

News about operating systems.

News about the pieces of software that are needed to run other softwares on a computer or a mobile device.

Hello.

Reply Score: 16

RE[3]: Comment by Nelson
by Radio on Tue 24th Sep 2013 15:13 UTC in reply to "RE[2]: Comment by Nelson"
Radio Member since:
2009-06-20

He transferred the phone division to a healthy buyer with an interest in continuing the vision that many employees in Finland worked on, and he unlocked shareholder value for the remaining company.
Just to show how stupid this is, here is an metaphor: consider, on one side of a city, an upper class school, and on the other side, a desheritate school, so wide apart that the worst student of the upper school is better than the best student of the lower school.

Now imagine that the worst student of the upper school decides to go to the lower school. Suddenly, the level in BOTH schools has risen.

Do you really think anything has improved?

Statistics are funny, heh?

Reply Score: 4

v RE[4]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 15:29 UTC in reply to "RE[3]: Comment by Nelson"
RE[3]: Comment by Nelson
by dsmogor on Tue 24th Sep 2013 16:47 UTC in reply to "RE[2]: Comment by Nelson"
dsmogor Member since:
2005-09-01

Using your logic, Nokia shareholders would get much better off if Nokia had simply offered Samsung a takeover/merger deal in 2010/2011, than struggling alone with WP mission, after most MS partners have left the building.
Not to mention that MeeGo was much more featurefull than WP at that time and some Nokia signature features got supported only on subset of Lumias, 2+ years later.
Recall it was in hugely dominant position by then, (all of which was ruined during Elop's tenure) and any smartphone contenter would have happily paid 10x current price just to get its market share.
And no, it's not Nokia that dropped the ball here. It made everything to make WP/Lumia successful:
- put it in award winning design
- followed on with HW innovation in screen and photo departments
- put all the weight of its brand (still strong in many parts of the world) behind it despite WP missing signature features
- ditched all of it's native production capability to align with WP limitations
- agreed to lower ASP and profitability to offer wide pricing levels despite WP limitations

It's really not Nokia hw design fault that its WP devices have failed to gain traction.

Reply Score: 6

RE[4]: Comment by Nelson
by mutantsushi on Tue 24th Sep 2013 22:20 UTC in reply to "RE[3]: Comment by Nelson"
mutantsushi Member since:
2006-08-18

This is the point in terms of the potential criminal/civil liability of the Nokia boards' actions. If in 2010 they were offering Elop a bonus for selling to MS, that means at that point they wanted to get out and sell the company. Which is a perfectly valid choice to make in a shifting, competitive marketplace.

But if they made the decision to sell the phone part of the company, they are LEGALLY OBLIGATED to pursue best share-holder value. That generally is served by having several potential buyers. There is also the aspect of selling the IP separately from the then valid phone and OS business for even more money, although if the total offered for the whole package is higher it might make sense to go with that rather be compelled to go with the highest bidder for each component.

What they then actually did is destroy Symbian and MeeGo, removing (or lessening the value/interest for) buyers interested in those for their own sake. They then turned the entire non-feature phone aspect of the company into a Windows Phone shop, removing (or lessening the value/interest for) buyers not interested in Windows Phone. Anybody bidding for it in 2010 (say, Samsung) would be bidding both for the inherent value in Nokia AND the value in denying Nokia to their potential competitors, which should increase the value whoever purchases it (e.g. MS or Samsung). In 2013, there is little value in buying Nokia for anybody else besides MS, and the inherent value for MS is not high either: nothing is stopping MS from just making it's own Windows Phone division from scratch and they already have a licence to Nokia Maps.

That is the potentially criminal and civilly liable action here. If MS was interested in Nokia as Windows Phone partner in 2010, they could have bid to buy it against other companies who would not use Windows Phone with their Nokia purchase.

EDIT: And incidentally, I'd say this lessens any of Elops' own liability, if this is exactly the precise thing he was hired on to do from the beginning... Although I believe he still has legal liabilities in his role as CEO, irregardless of the policy of the board.

Edited 2013-09-24 22:36 UTC

Reply Score: 2

RE: Comment by Nelson
by Bill Shooter of Bul on Tue 24th Sep 2013 14:40 UTC in reply to "Comment by Nelson"
Bill Shooter of Bul Member since:
2006-07-14

That's a very business school answer. Its a very broken part of our economy that we reward CEO's so highly regardless of their success.

There really is no honest view of situation other than Steven Elop helped himself and Microsoft, more than he helped Nokia or its stockholders. Regardless of what you think about any party involved or their motivations, that is the objective outcome.

Reply Score: 8

RE[2]: Comment by Nelson
by lucas_maximus on Tue 24th Sep 2013 16:31 UTC in reply to "RE: Comment by Nelson"
lucas_maximus Member since:
2009-08-18

If the stock went up surely that benefited the shareholders as well, who are ultimately the owners of the company.

Reply Score: 2

RE[3]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 17:04 UTC in reply to "RE[2]: Comment by Nelson"
Nelson Member since:
2005-11-29

People who have no skin in the game pretending they understand what's going on. Nokia even being alive today is proof of how completely clueless some of the commenters here are.

I've predicted volume increases, they've happened. I said they'd live, they did. I said there'd be no profit warning and no channel stuffing, there wasn't. I said the drop in Q2 2012 was a blip, it was. Its like you lose for being right here.

Meanwhile people who are consistently wrong on just about everything Nokia are up voted because people can't get over their MeeGo hardon and Microsoft hatred.

I took a financial bet on my predictions and it paid off, not something I see anyone of the armchair CEOs doing.

Reply Score: 1

RE[4]: Comment by Nelson
by M.Onty on Tue 24th Sep 2013 18:14 UTC in reply to "RE[3]: Comment by Nelson"
M.Onty Member since:
2009-10-23

People who have no skin in the game pretending they understand what's going on. Nokia even being alive today is proof of how completely clueless some of the commenters here are.


I've predicted volume increases, they've happened. I said they'd live, they did. I said there'd be no profit warning and no channel stuffing, there wasn't. I said the drop in Q2 2012 was a blip, it was. Its like you lose for being right here.


I'm not sure how a company that used to be near or at the top of its field surviving just three years is proof of good strategy. Even Blackberry has taken longer to collapse than that.

But regardless, as has been pointed out above, the "people who have no skin in the game" on this site are those who're interested in these companies being successful enough that they do interesting things with mobile operating systems, not that they survive by ceasing to do anything with mobile operating systems. So you're probably looking in the wrong place for appreciation of the minutiae of your financial predictions.

***

There doesn't seem to be any pretence any more that these stories & subsequent comment threads are anything other than a fiery debate between Thom & his like-minded posse, & yourself, Nelson.

Given that, I would be interested to read your reply to the most apparently damning comment thus far from the former camp:

http://www.osnews.com/permalink?572999

Seems conclusive to me (as you can probably tell). But then, I only hang around the OS scene for the occasional Riscos & Haiku story, so I'm prepared to be otherwise educated.

Reply Score: 1

RE[5]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 19:30 UTC in reply to "RE[4]: Comment by Nelson"
Nelson Member since:
2005-11-29

I've addressed Tomi's garbage many, many times in the past. Its just time consuming to dig up the sources to counter that wall of text everytime its copy and pasted here. And people don't generally seem to care about the facts of the matter, so it isn't worth my time.

If you are personally interested though, there is a website which debunks many of his claims(go figure a guy so wildly misleading and inaccurate that he has a website dedicated to disproving his nonsense)

http://dominiescommunicate.wordpress.com/

Read just a few of them, they're really well written by a Nokia insider.

Reply Score: 2

RE[6]: Comment by Nelson
by M.Onty on Wed 25th Sep 2013 09:54 UTC in reply to "RE[5]: Comment by Nelson"
M.Onty Member since:
2009-10-23

Thanks

Reply Score: 2

RE[4]: Comment by Nelson
by Radio on Tue 24th Sep 2013 19:45 UTC in reply to "RE[3]: Comment by Nelson"
Radio Member since:
2009-06-20

Nokia the phone company is dead. They exited the market. They lost.

Next week, Nelson will explain us how Germany won both World Wars.

Reply Score: 3

RE[5]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 21:07 UTC in reply to "RE[4]: Comment by Nelson"
Nelson Member since:
2005-11-29

The Lumia brand, services, 32,000 employees, and over 8,000 patents have been sold to Microsoft.

There will be Lumia phones next year and the year after that, how is that a loss?

Only in your very peculiar brain could that be construed as a loss.

Reply Score: 3

RE[5]: Comment by Nelson
by Morgan on Tue 24th Sep 2013 23:10 UTC in reply to "RE[4]: Comment by Nelson"
Morgan Member since:
2005-06-29

Next week, Nelson will explain us how Germany won both World Wars.


Of course he won't, silly! That has nothing to do with stock prices. ;-)

Reply Score: 4

RE[6]: Comment by Nelson
by shotsman on Wed 25th Sep 2013 07:32 UTC in reply to "RE[5]: Comment by Nelson"
shotsman Member since:
2005-07-22

Nelson will just turn his 'blind eye' towards that thorny question.

Reply Score: 1

RE[3]: Comment by Nelson
by acobar on Tue 24th Sep 2013 17:24 UTC in reply to "RE[2]: Comment by Nelson"
acobar Member since:
2005-11-15

If the stock went up surely that benefited the shareholders as well, who are ultimately the owners of the company.

It depends on if its was sent to its lowest before start to recover, what happened on this case.

Reply Score: 3

RE[4]: Comment by Nelson
by lucas_maximus on Tue 24th Sep 2013 18:15 UTC in reply to "RE[3]: Comment by Nelson"
lucas_maximus Member since:
2009-08-18

It gained, I actually checked it over 5 years on google markets.

https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=max...

The price has gone up since 2012. Before then there was general trend down before Elop joined and for a year and a bit after he joined.

Reply Score: 2

RE[3]: Comment by Nelson
by Bill Shooter of Bul on Tue 24th Sep 2013 18:51 UTC in reply to "RE[2]: Comment by Nelson"
Bill Shooter of Bul Member since:
2006-07-14

Yeah, it went up from two months ago, Not up since Elop took over.

Reply Score: 2

RE[4]: Comment by Nelson
by lucas_maximus on Tue 24th Sep 2013 19:16 UTC in reply to "RE[3]: Comment by Nelson"
lucas_maximus Member since:
2009-08-18

It was on a downward trend long before to be fair. You can see it for yourself on Google Finance.

Reply Score: 2

RE[5]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 19:24 UTC in reply to "RE[4]: Comment by Nelson"
Nelson Member since:
2005-11-29

People conveniently forget Nokia was once worth $40 a share.

Reply Score: 2

RE[6]: Comment by Nelson
by lucas_maximus on Tue 24th Sep 2013 19:30 UTC in reply to "RE[5]: Comment by Nelson"
lucas_maximus Member since:
2009-08-18

I dunno enough about this stuff, but a quick look at the stock price shows an obvious trend downwards well before late 2010 which according to Wikipedia is when he started as position of CEO.

I also tend to believe that "Rome wasn't built in a day" and I seen a rather agile business like the one I work in take 2 years to recover from bad management, we have less than 1000 employees.

So I am inclined to agree with your point of view.

Edited 2013-09-24 19:31 UTC

Reply Score: 2

RE[7]: Comment by Nelson
by Nelson on Tue 24th Sep 2013 19:39 UTC in reply to "RE[6]: Comment by Nelson"
Nelson Member since:
2005-11-29

Yeah, a pretty sharp drop prior to Elop, huge compared to the drop under his tenure. The stock also stabilized around $4 and is up at $7 and poised to increase further. Nokia is also paying out a one time dividend in the spring according to rumors.

Nokia is actually a nice investment target even without phones, I kind of regret selling off my shares, but I took the profit while it was infront of me.

Reply Score: 3

RE[5]: Comment by Nelson
by Bill Shooter of Bul on Tue 24th Sep 2013 22:00 UTC in reply to "RE[4]: Comment by Nelson"
Bill Shooter of Bul Member since:
2006-07-14

Yeah, it was a downward trend. But objectively the company was worth a lot less than when he took over. You can argue many different things to say that he did a good job which are mostly a matter of opinion. He wasn't able to turn things around. Maybe no one could have, maybe he prolonged the life of the company. Who knows.

Reply Score: 2

RE[6]: Comment by Nelson
by lucas_maximus on Thu 26th Sep 2013 18:42 UTC in reply to "RE[5]: Comment by Nelson"
lucas_maximus Member since:
2009-08-18

That is my point, we don't know because we are looking from the outside in to a company and culture we haven't worked in.

Reply Score: 2

A prize for lowering Nokia's value?
by oper on Tue 24th Sep 2013 12:46 UTC
oper
Member since:
2012-08-30

As Tomi Ahonen wrote in http://communities-dominate.blogs.com/brands/2013/09/the-do-it-your...

[...] Elop can be evaluated as Nokia CEO, for Nokia Corporate total results during his tenure. Or, because Nokia just now sold its total handset unit to Microsoft, it can be useful to see what results did Elop achieve at that handset unit (this includes both smartphones and featurephones). And lastly, since Elop did make a major change to Nokia's largest and most profitable division, the smartphone unit, it is a detail worth considering. No more analysis, just the facts...

NOKIA CORPORATION UNDER ELOP

First 6 months - Corporate quarterly revenues up 26% from 10.0B Euro to 12.6B Euro
Next 2.5 years - Corporate quarterly revenues down 55% from 12.6B Euro to 5.6B Euro

First 6 months - Corporate quarterly profit up 200% from 295M Euro to 884M Euro
Next 2.5 years - Corporate quarterly profit of 884M Euro turned into loss of -115M Euro

During first 6 months - Standard & Poor's rating for Nokia A, Moody's rating A2, Fitch's rating A
On last day of office - Standard & Poor's rating for Nokia junk, Moody's rating junk, Fitch's rating junk

On day before Elop announced as new CEO - Nokia share price $9.70
On day before Elop released his Burning Platforms memo - Nokia share price $11.28 (up 16%)
On day before Nokia announces Elop to step down as CEO - Nokia share price $3.90 (down 65%)


NOKIA HANDSET UNIT PERFORMANCE UNDER ELOP

First 6 months - Handset quarterly revenues up 25% from 6.8B Euro to 8.5B Euro
Next 2.5 years - Handset quarterly revenues down 69% from 8.5B Euro to 2.6B Euro

First 6 months - Total handsets profit first 6 months 1.8B Euro
Next 2.5 years - Total handsets loss next 2.5 years 361M Euro

First 6 months - North America quarterly handset volume flat from 2.6M units to 2.6M units
Next 2.5 years - North America quarterly handset volume down 80% from 2.6M units to 0.5M units

First 6 months - China quarterly handset volume up 13% from 19.3M units to 21.9M units
Next 2.5 years - China quarterly handset volume down 81% from 21.9M units to 4.1M units

Nokia handset market share when Elop started - 33%
Nokia handset market share when Elop departed - 14%

Nokia ranking handsets when Elop started - 1st
Nokia ranking handsets when Elop departed - 2nd

Gap to leader when Elop started - Nokia 50% bigger than number 2 (Samsung)
Gap to leader when Elop departed - Samsung 30% bigger than Nokia

This handset unit has now been sold (plus patents and mapping licences) for 5.3B Euro to Microsoft


NOKIA SMARTPHONE DIVISION PERFORMANCE UNDER ELOP

First 6 months - Smartphone quarterly revenues up 29% from 3.4B Euro to 4.4B Euro
Next 2.5 years - Smartphone quarterly revenues down 73% from 4.4B Euro to 1.2B Euro

First 6 months - Smartphone quarterly profit up 94% from 283M Euro to 548M Euro
Next 2.5 years - Smartphone quarterly profit of 548M Euro turned into loss of -168M Euro

First 6 months - Smartphone quarterly volume up 18% from 24.0M units to 28.3M units
Next 2.5 years - Smartphone quarterly volume down 74% from 28.3M units to 7.4M units

Nokia smartphone market share when Elop started - 35%
Nokia smartphone market share when Elop departed - 3%

Nokia ranking smartphones when Elop started - 1st
Nokia ranking smartphones when Elop departed - 9th

Gap to leader when Elop started - twice as big as number 2 (RIM) or number 3 (Apple)
Gap to leader when Elop departed - Samsung smartphones is 12x bigger than Nokia smartphones


Worst CEO ever? You make the call. Was Nokia smartphone unit truly in catastrophic trouble before the Burning Platforms memo? You make the call. Did the Elop Effect turn strong growth into collapse? You make the call.

Reply Score: 19

M.Onty Member since:
2009-10-23

Ah, but don't forget the recent double digit increase in market share for mid-range Lumias in Brazil, Westphalia & Milton Keynes.

Reply Score: 4

Vanders Member since:
2005-07-06

I understand Nokia have 100% market share for phones with the name "Lumia" in them.

Reply Score: 13

tylerdurden Member since:
2009-03-17

The YoY rise in the number of Lumia models with 3 or more digits has also been spectacular: 1500% since 2011!!!

Reply Score: 4

Rehdon Member since:
2005-07-06

Thanks for the recap, I find it pretty damning.

Reply Score: 2

acobar Member since:
2005-11-15

Wow! That speaks clear and loud. Actually, it screams. I can not see how such catastrophic tenure can be defended if not by selfish interest.

Reply Score: 1

Vanders Member since:
2005-07-06

So the real questions are:

1) Would the outcome have been better or worse for Nokia if they had not signed on with Microsoft?
2) Do we think this is a good outcome for Nokia, overall, and how much responsibility do we think Elop has for it?
3) Would someone have been able to stabilise and grow Nokia better than Elop did using a different strategy?

So personally, I think Nokia are in a better position than they would have been if they hadn't signed up with Microsoft, but at the same time I don't believe a sale to Microsoft is a good result: in reality it's been quite a sad end.

Could someone have done a better job than Elop? Now that's a key question, and I'm honestly not sure about the answer to that.

Reply Score: 3

Not only Finland is enraged.
by isaba on Tue 24th Sep 2013 14:52 UTC
isaba
Member since:
2006-12-30

Nokia was a great company with superb products. Yes, they missed the train of change in the smartphone market due to shortsightedness, but that does not invalidate their great job in devices, in feature phones (most Asha phones are simply good enough for most people!) and innovative ideas in such difficult times.

I also feel enraged and ashamed of these practices. I am aware that morals in business do not have any chance lately, but this, this ending is unnerving and disgusting.

Reply Score: 2

RE: Not only Finland is enraged.
by bnolsen on Tue 24th Sep 2013 17:14 UTC in reply to "Not only Finland is enraged."
bnolsen Member since:
2006-01-06

The market was changing from dumb/feature phones to smart phones. Nokia's board was convinced their current business plan wasn't working and were sold on a new business plan that didn't pay off. Apparently no one offered a competing business plan that was appealing (that may have included android).

Yes, the stupidity of Elop combining the ratner and osbourne effects really kicked up the drama aspect of Nokia's spectacular flameout.

It's probably fine that nokia is investigated. What they'll probably find was a board and management full of total incompetents who essentially drove their mobile unit into unprofitability.

The moral of the story is: incompetence should be allowed to fail. smaller, newer, more nimble players should be allowed to succeed. Time to take on the evil patent system which kills this natural business cycle.

Reply Score: 4

A proper perspective
by Lava_Croft on Tue 24th Sep 2013 16:51 UTC
Lava_Croft
Member since:
2006-12-24

It's very good that the role played by Nokia's BoD is coming to the forefront. These are the people actually responsible for this horrible death of Nokia's handset division.

Reply Score: 2

...
by Hiev on Tue 24th Sep 2013 17:22 UTC
Hiev
Member since:
2005-09-27

pfff, the CEO can't do shit w/o shareholders approval, so no, don't blame Elop.

Edited 2013-09-24 17:37 UTC

Reply Score: 1

RE: ...
by Nelson on Tue 24th Sep 2013 19:32 UTC in reply to "..."
Nelson Member since:
2005-11-29

And Elop didn't negotiate the sale. So Microsoft can now mind control the BOD, high level executives, and the Board Chairman.

The tinfoil hats are out in full force.

Reply Score: 2

...
by Hiev on Tue 24th Sep 2013 17:28 UTC
Hiev
Member since:
2005-09-27

First of all, Nokia was already a mess when Elop arrived, Nokia was to incompetent to build a toolkit and displace the iPhone, they didn't want to use Android, they went from GTK to Qt and that sucked also, mainly because GTK is not friendly and Qt was alpha quality on mobile, so they had to fix that first and it took them to much time, so they needed a toolkit recognized and friendly that was not Android, Elop proposed Windows the sharehloders agreed, end of story.

The lack of a quick reaction killed Nokia, not Elop.

Edited 2013-09-24 17:32 UTC

Reply Score: 4

RE: ...
by ricegf on Tue 24th Sep 2013 18:30 UTC in reply to "..."
ricegf Member since:
2007-04-25

Qt was alpha quality on mobile, so they had to fix that first and it took them to much time, so they needed a toolkit recognized and friendly that was not Android, Elop proposed Windows the sharehloders agreed, end of story.


Actually, having fixed Qt into the foundation of an award-winning (on N9) product- and notice how many competing products are now leveraging their Qt investment in mobile - it was doubly foolish to then abandon it and go with another alpha quality product, Windows Phone 7.

The lack of a quick reaction killed Nokia, not Elop.


Yes, it was the potentially fatal disease that afflicted Nokia when Elop took over. Missing the 2010 holiday selling season with N9 was a huge blow.

It's possible that nothing could have saved Nokia in 2011, but a "Symbian Forever" announcement to keep the faithful on-board during the transition, touting the N9 roll out as the revolutionary product the reviewers consistently said it was, and quietly shifting gears to focus on Android camera phones is still the obvious and best strategy - as so many were saying in 2011.

Frankly, if Nokia couldn't make money in smartphones with the most popular OS on the planet, they certainly wouldn't win with the bargain bin OS that until recently was WinPhone. *shrugs*

Reply Score: 6

RE[2]: ...
by Hiev on Tue 24th Sep 2013 18:36 UTC in reply to "RE: ..."
Hiev Member since:
2005-09-27

and notice how many competing products are now leveraging their Qt investment in mobile

And notice how much of them have succeded, zero, actually even going out of bussines like the BlackBerry.

Yes, it was the potentially fatal disease that afflicted Nokia when Elop took over

That desease was there before Elop arrived.

Reply Score: 4

RE[3]: ...
by Nelson on Tue 24th Sep 2013 19:33 UTC in reply to "RE[2]: ..."
Nelson Member since:
2005-11-29

For most people here, their knowledge of Nokia started February 2011. The disaster under OPK which precipitated thus entire mess never happened c

Reply Score: 3

RE[3]: ...
by ricegf on Tue 24th Sep 2013 20:25 UTC in reply to "RE[2]: ..."
ricegf Member since:
2007-04-25

and notice how many competing products are now leveraging their Qt investment in mobile

And notice how much of them have succeded, zero, actually even going out of bussines like the BlackBerry.


Most are new and haven't launched their first product yet, so it's a little premature to be counting success and failure there. And Blackberry actually survived longer than Nokia, so that's a pretty weak poster child for your argument.

Yes, it was the potentially fatal disease that afflicted Nokia when Elop took over

That desease was there before Elop arrived.


If you re-read more slowly what I wrote, you'll find that you're agreeing with me. :-)

Reply Score: 1

RE[4]: ...
by Hiev on Tue 24th Sep 2013 20:47 UTC in reply to "RE[3]: ..."
Hiev Member since:
2005-09-27

Most are new and haven't launched

That's my point, it would took Nokia many years to deliver what it is already delivering with Windows Phone, BlackBerry failed to make profit with Qt, developers were simple not interested, what makes you think the other vendors using Qt won't have the same fatal luck?

If you re-read more slowly what I wrote, you'll find that you're agreeing with me.

I don't, In my comment I explain the mess Nokia was before Elop arrival, the problems they had figuring out what toolkit to use, trying to prolonge the life of Symbian, I think it is you who needs to re-read my comment.

Edited 2013-09-24 20:54 UTC

Reply Score: 3

RE[5]: ...
by M.Onty on Tue 24th Sep 2013 22:52 UTC in reply to "RE[4]: ..."
M.Onty Member since:
2009-10-23

Yes, it was the potentially fatal disease that afflicted Nokia when Elop took over.

That desease was there before Elop arrived.


If you re-read more slowly what I wrote, you'll find that you're agreeing with me.

...I think it is you who needs to re-read my comment.


Its ambiguously worded, but you are agreeing with each other. What the original statement should have been worded something like ...

"Yes, it was the potentially fatal disease that already afflicted Nokia when Elop took over."

Reply Score: 2

RE[6]: ...
by Hiev on Tue 24th Sep 2013 23:13 UTC in reply to "RE[5]: ..."
Hiev Member since:
2005-09-27

Yeah, afflicted is the keyword.

Reply Score: 2

RE[5]: ...
by ricegf on Tue 24th Sep 2013 23:33 UTC in reply to "RE[4]: ..."
ricegf Member since:
2007-04-25

I think it is you who needs to re-read my comment.


*sigh* We seem to be back in kindergarten. My entire comment was

Yes, it was the potentially fatal disease that afflicted Nokia when Elop took over. Missing the 2010 holiday selling season with N9 was a huge blow.


The N9 was largely developed prior to Mr. Elop's arrival, and he arrived far too late to affect its chances of shipping by the 2010 holiday selling season. He also specifically mentioned discovering the N9's delayed ship date as part of rationalizing his decision to abandon MeeGo.

Hence, when at the exact moment that Mr. Elop took over as Nokia's leader, Nokia was already afflicted with an inability to deliver products on schedule.

Not sure how to say it any more clearly than this. If you still think we're disagreeing, then we'll have to disagree to disagree. :-D

what makes you think the other vendors using Qt won't have the same fatal luck?


I'm giving them the benefit of the doubt, though it's a tall order for any company to enter the smartphone market at this point.

Two in particular stand out.

Jolla, started by the folks who created the N9, sold out their first set of pre-orders and are conducting a second round limited to Finland (you know, that country in the article whose citizens are looking for a way to show their displeasure with Microsoft's acquisition of Nokia's smartphone business). Sounds like they may have a good shot at a market niche there.

And Canonical, backed for almost a decade by a determined bazillionaire, set several records with their Ubuntu Edge funding campaign. Most telling, they raised more than any other campaign in history thus far. Kind of indicative of a potential market niche as well.

But we won't know until products are shipping. I'm willing to wait and see what happens. Perhaps you should too?

Edited 2013-09-24 23:41 UTC

Reply Score: 1

RE[6]: ...
by Hiev on Tue 24th Sep 2013 23:37 UTC in reply to "RE[5]: ..."
Hiev Member since:
2005-09-27

That not may be the case, the N9 failed to launch becuase it wasn't ready, they had problems with the store and the developer tools, do you think they would hold back the launch and sales oportunity just by Elop? of course not, they were having technical problems.

Reply Score: 3

RE[2]: ...
by lucas_maximus on Tue 24th Sep 2013 19:58 UTC in reply to "RE: ..."
lucas_maximus Member since:
2009-08-18

People stopped buying a lot of nokia stuff after the iPhone and Android started getting a foothold.

I owned nokia phones of various pedigree and always like symbian and their build quality (I still have a 3210 backup phone that works fine), but everyone was having android kit or blackberries in the UK from 2008 ...

I used to live in one of the biggest yuppie towns outside of London and the trend was obvious.

Reply Score: 3

RE[3]: ...
by allanregistos on Fri 27th Sep 2013 04:39 UTC in reply to "RE[2]: ..."
allanregistos Member since:
2011-02-10

People stopped buying a lot of nokia stuff after the iPhone and Android started getting a foothold.

I owned nokia phones of various pedigree and always like symbian and their build quality (I still have a 3210 backup phone that works fine), but everyone was having android kit or blackberries in the UK from 2008 ...

I used to live in one of the biggest yuppie towns outside of London and the trend was obvious.

Same happened here. I think I am going to observe Nokia's booth next time, how they attract buyers than other vendors. That's a perfect objective evidence of how Nokia was doing in the market.

Reply Score: 1

RE: ...
by Radio on Tue 24th Sep 2013 19:51 UTC in reply to "..."
Radio Member since:
2009-06-20

Yeah, Microsoft has been so much faster at delivering a mobile OS!

Reply Score: 1

RE[2]: ...
by Hiev on Tue 24th Sep 2013 20:43 UTC in reply to "RE: ..."
Hiev Member since:
2005-09-27

Yeah, a lot faster, but the mobile ecosystem is not just the phone software, it also the store infrascructure, the developer tools, the security, the browser, the services, etc, etc. And MS delivered those in a record time.

Edited 2013-09-24 20:49 UTC

Reply Score: 3

RE[3]: ...
by ricegf on Wed 25th Sep 2013 11:16 UTC in reply to "RE[2]: ..."
ricegf Member since:
2007-04-25

Yeah, a lot faster, but the mobile ecosystem is not just the phone software, it also the store infrascructure, the developer tools, the security, the browser, the services, etc, etc. And MS delivered those in a record time.


You're seriously arguing that Microsoft created a credible mobile ecosystem for WinPhone faster than Apple did for the original iPhone?!?

Reply Score: 1

RE[4]: ...
by Hiev on Wed 25th Sep 2013 15:03 UTC in reply to "RE[3]: ..."
Hiev Member since:
2005-09-27

You tell me, how much time took Apple to do the same?

Reply Score: 3

Comment by Anonymous Penguin
by Anonymous Penguin on Tue 24th Sep 2013 18:12 UTC
Anonymous Penguin
Member since:
2005-07-06

Finland is boiling with rage this weekend over the $25 M bonus payment the CEO Stephen Elop is set to receive as he leaves Nokia NOK -0.75% after his two-year tenure.

Same feeling. Considering what Nokia used to be, and what could have been, you can only feel outrage.

Reply Score: 3

Psion
by M.Onty on Tue 24th Sep 2013 18:53 UTC
M.Onty
Member since:
2009-10-23

This Nokia business reminds me of Psion more than a little.

They thought it was a smart idea to get out of a tricky market situation by spinning out their OS, in the process losing too many smart people to carry on as an independently influential entity, thus ending up scuttling off to make niche devices for businesses.

Apparently they're richer now then they ever were in the tricky & turbulent waters of ceaseless innovation. Not much, mind. Entirely irrelevant & uninteresting too.

If you're interested:

http://www.theregister.co.uk/2007/06/26/psion_special/

Reply Score: 2

Nelson sure is having a fit...
by Dano on Wed 25th Sep 2013 05:36 UTC
Dano
Member since:
2006-01-22

...but even though the company may have been run like shit they make some nice phones.

Reply Score: 1

$25M
by pos3 on Wed 25th Sep 2013 05:44 UTC
pos3
Member since:
2010-06-25