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Nokia drops below $2 a share, HTC also having a rough time

WP Central

How low can it go?

Although Nokia has been catching headlines for their downturn in market performance, HTC too has also been feeling the pinch of poor profits.

Nokia yesterday finished the week off at $1.92 a share, falling below the $2 mark for the first time since September 1994. A lot can be made of that $2 number which is more of a psychological barrier than anything real but make no mistake, Nokia is feeling the financial pinch.

The drop seems to correlate with new rumors that Amazon may be making a go at its own phone which results in fears of tougher competition down the road.  Combined with the Mozilla news earlier this week, the Eurozone financial crisis, lagging sales of the Lumia line and no confidences from investors and you have a plummeting stock price. It’s a vicious cycle and often one not hinged on reality.

Seeking Alpha actually has a nice summary of the Nokia situation.  In short, they are still optimistic as Nokia should be fine for the next 12 months and they don’t foresee any more bad news for Nokia i.e. the worst may finally be out of the way. Nokia is poised to cut 10,000 jobs by 2013 and continue to restructure, reducing overhead costs in the long term. The question for would be investors is should you buy Nokia yet? At least for one contributor at Seeking Alpha, the answer is “almost” as the stock may still dip lower but a return to profitability status is expected sooner than later...

Things aren’t looking too great for HTC either as they’ve just posted their Q2 2012 financial results (PDF) (see Reuters). The Taiwanese manufacturer has had two bad quarters so far and while things have improved they’re still getting ugly.  For Q2, HTC has reported a 57.8 percent net profit drop resulting in profits of T$7.4 billion ($250 million) but down from T$17.52 billion this time last year.

WP Central

The HTC One X is facing stiff competition from Samsung

The reasons for HTC’s poor performance are varied from the Eurozone crisis, lukewarm reception to their One series, the temporary blockage of imports by US Customs and strong competition from Samsung. With Android, HTC has very slim profit margins (HTC pays Microsoft a royalty on patents) and litigation from Apple has really taking a toll. On that latter point, US Customs temporarily held up the One X (review) and Sprint's EVO 4G LTE (review) from hitting shelves, resulting in weeks of trickling sales.  In addition, complaints of poor battery life and customers waiting on Samsung’s Galaxy S III model leaves little room for failure.

Although Samsung is doing well with their Galaxy series, HTC shows how pushing Android is not an easy task, even when you’re the #2 guy selling it. For those reasons we suggested that it was a good thing Nokia didn’t adopt Android back in early 2011. Nokia’s volume of sales would presumably have been higher but net profit would have been razor thin, especially since Nokia’s supply chain and manufacturing costs are still higher than HTCs. (Maybe HTC will have a boost with Windows Phone 8 in the fall?)

In the end, very few smartphone OEMs are exploding with sales right now. Samsung and Apple seem to be the exception with most companies being dragged down with a global recession, stiff competition and market uncertainty.

For Nokia though, it looks like they may be approaching bottom which means they can only go up, right?

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Reader comments

Nokia drops below $2 a share, HTC also having a rough time

86 Comments
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Lots of risks for a modest upside - definitely not a stock that the average investor should be dabbling in. Besides they'll probably take a hit in 2 weeks when Microsoft reports (unrelated) losses for the quarter (guilt by association).

If anyone has an impact on HTC's stock, its Android. Count how many Android devices they carry as opposed to WP. What did you come up with? As far as Nokia goes, they're failure is global and WP sales have little impact on what's happening to them as well. Many of the article headings have negative affects on MS, so it would be nice to see the facts on how Nokia and HTC were doing prior to Nokia manufacturing 4 WP and HTC putting out the titan series. We need to keep a positive light on MS and not appear to be blaming them for Nokia and HTC's failures as companies

HTC is basically an Android phone maker with a Windows Phone hobby - their sales and profits are all about Android. While it's true that Nokia's problems are their own making, bith Nokia and Microsoft have admitted that WP7 has not done nearly as well as they expected - MIcrosoft clearly deserves criticism.

I believe that many financial advisors are afraid of Nokia cutting into Apple profits and they continue to knock Nokia hoping to drive them out of the market along with WP. I continue to buy Nokia as I believe they have a strong product with the best OS available for phones and tablets.

A company working on a comeback is no threat to Apple. It's nice that you put your money where your mouth is, but don't assume you're going to make money until Nokia proves it can execute its plan. WP8 may be great, but the executives running Nokia have yet to show they'll know how to profit from it.

I must disagree! If Apple is not concerned, along with financial advisors, then why is Apple continuing to hold up Samsung and HTC devices from entering the US market. They cannot stop Nokia in this manner, so they are using the financial advisers to downplay Nokia. Mark my word that Apple is very concerned about Nokia with their Windows Phone integration.

Wow, I hope no one takes financial advice from you, but keeping buying that Nokia stock, go for broke, and in 2 years when your out of money for your investment, let us know how it feels.
Apple is afraid of Android, NOT, Windows Phone. WP isn't selling and Nokia is losing money to the point where it's sad. People are losing their jobs at Nokia, thousands! WP has almost no traction other then to MS fanboy's. and you think Apple is scared of them? Android is on top of the mobile world, which is why Apple will do anything to stop that gap, which is what they do with those lawsuits. If Nokia was on top with WP, they would try the same tactic. Where in the world you get that somehow they are afraid of Nokia, has got to be the funniest thing posted yet. 

I've thought this, too, but it makes no sense to attack the little guy. If Nokia doesn't make it there will be other companies that will carry the Windows OS. What investors and Apple needs to worry about is Microsoft.

I bought at $2.82 and while its very tempting to buy now, I believe it will go down a bit more, especially July 19 when they announce their earnings. A few weeks ago Nokia said they would have a loss and the market reacted and the 19th shouldn't matter but because investors are looking for any reason to put down Nokia, im pretty sure Nokia's stock will take another hit. At under $2 a share, this is a better gamble than going to the casinos.

I've taken some big losses (small time investor), but I'm still buying Nokia stock. I have faith that it will rebound.

Nokia WP8
Nokia Tablets...
Nokia PCs...

I just want to make enough profit to buy or put a decent downpayment on 2013+ Ford Taurus SHO or maybe a BMW M5.

I am amazed that analysts can operate so intensively to know what happens in the next month, and invoke fear into the average consumer, who don't have the foggiest idea what its all about.  Seeing the line up of microsofts windows 8 platform, I wouldn't worry too much about what the financial market is saying. I know I'm feeling the windows 8 love.

I buy $50 worth each month. Not much, but I'm up to 200 shares now. I had stopped investing after they fell below $7/share.

Time to invest more methinks.

honestly. Nokiawill be fine. Ms is basically gonna keep pumpin money. As for htc. THEY need to do better for their one series. And better put ugrades on da new htc one wp better than their android versions and have no problems

That would be a bad decision considering that android made HTC all the money that it has now. I think google needs to do more innovation rather then just copy everyone else and get people who use their software into trouble. I I still think the HTC hero was the beat phone from HTC and the HD2 running window mobile, HD7 was good too.

"I own several thousand shares of Nokia stock, and will am looking to pick up more soon."
 
So how much money have you lost so far?

Until a person actually sells there position(s) the answer is always zero.
Of course Nokia has yet to prove they can sell WP's in mass there real problem is Nokia Siemens Networks. They desperately need to get out of that business.
As for the negative press there is another way to look at it. Nokia has been made a nearly household name again. Although not in a positive light there name is still being mentioned. Its actually the best advertising you could ever hope for. Its free!

in fantasy sports, making silly, unfounded, and lopsided predictions about free agents and trade targets is called "rosterbating."  

I wonder why my comment got deleted? Because I said buying Nokia stock right now is a foolish idea. I have lost almost 80% behind Nokia and if anyone feels it will improve they need to seriously get their head checked. Not a good move and if u buy thousands of shares u aren't wise

Your comment was deleted because you're deliberately instigating someone by calling them "a damn fool".

Tired of the attitudes and name calling here. You can make your point without being a jerk.

You lost 80% value of Nokia stock? You probably purchased it when it's still high, you should have waitted.

80% means he would have paid about $10 - at that point it already had fallen quite a ways from the peak of $55 around 2000, or even from $40 it was still worth in 2008.

And you sir are correct. I thought I was getting a great deal just above $11 a share. My o my look how the tables gave turned. I really thought it couldn't go any lower, but yes well over 80% lost.

Nokia will be fine... It will comes down to wp8, how well it will sell.. I truly believe Nokia wp8 will survive this,android is just so complicated,,HTC have to advertised advertised advertised wp8... And can they please make a quality phones... Titan 2 is really nice.. But there's something about my lumia 900

I like Nokia and hope they turn this around, and I think MS owes them BIG, they have make the brand lumia more popular  than windows phone its self, The are really pushing the product. I only hope MS Gives them the ability to come out first with WP8 and WINRT Table. That would be good pay back for Nokias Support.  What bad could happen to Nokia though I always wonder what is Google came in and purchased Nokia ? or Samsung. MS would be nothing without Nokia because No One Else is pushing WP.. HTC, Samsung, Motorola, and LG. they are all pushing Android except Nokia.

I wish there were an equivalent of me throwing something at their faces to show my displeasure at wall street and those dumb as investors...they don't know SQUAT! =p

Just bought 20 shares only for nokia. Hahha well see how well it goes for wp8 launch. If it dont work well I can always sell it

If MSFT buys Nokia it will send the signal that there flatlining. If MSFT don't save Nokia they may look bad ... it's a bad situation and the share cant go down much more or the company might crash.

Hey guys, you can't always sell stock, someone has to want to buy it. When a company falls too low it gets delisted from the major exchanges and your stock can easily become worthless. Wall Street analysts may be hated, but they know when to not invest thousands of dollars in a possibly failing company.

It's a shame the One series isn't doing better. As for Samsung I don't know why they get Apple level love. An overwhelming majority of people with troublesome phones I've cone across have been Samsung. I've began joking that people with problematic phones have been "Samunged."

I find it difficult to understand why the Samsung hype too. One X is better compared to S3, sense vs touchwiz, and hardware, but people just don't buy HTC. They buy galaxy like it is an Apple

From what I've seen, Samsung heavily advertise/promote their phones for months on end on almost all media like internet, radio, TV, newspapers and magazines. Something that no other mobile phone manufacturer can afford to do. Hence the hype and its larger visibility when compared to other Android OEMs like Motorola, Sony, LG and HTC combined, I assume.
 
Like you, I also ponder on Samsung's popularity especially when their phones seem to be made of cheap materials when compared to other Android OEMs like Sony and Motorola. Heck, even their appliances are not known for good quality, only slightly better than LG to be fair. Their electronics are pretty good though, especially their build quality when it comes to TVs.

If it can't do well in the public then privatize it. Since Microsoft is funding Nokia at the moment, they should be fine to remain private until the next wave.

I'm glad this info about HTC has come out so people can stop blaming windows phone; HTC has a whole lot more invested in Android and android runs on there flagship devices

I hope you guys buying know what you're doing. This stock has nowhere to go but down, and they only way it goes up is if someone buys them out. 
 

An "Amazon phone"? Seriously? Call me a silly foreigner, but there is no way an online retailer with limited presence outside the US and a dozen other countries should cause the stock of the largest manufacturer of cellphones in the world drop. I call shenanigans

No new in windows phone ri8 nw i just hate ri8 nw windows phone...no
new lock pattern, no new apps,, no new updats,, no new screen savers,,
no new unlock clocks,, wat can i do m just bored wid windows phone and
no gamez all gud gamez r paid i have windows ri8 nw:-(:-(:-(:'(:'(

I have a feeling that Nokia will be around for a long time. But, whether your NOK stocks will have any value will depend on two things:

1. Nokia recovers within 1 year,

2. Microsoft buys Nokia.

Your stocks will be worthless if:

1. Nokia fails, or

2. Nokia gets bailed out by the Finnish government after it goes bankrupt.

My guess is that Nokia gets an influx of cash from Microsoft before it comes close to bankruptcy. Why, cause that's what you'd do to your biaaatch.