WP Central
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Nokia’s stock rallies back to nearly $3 a share on iPhone news

Did Apple's announcement help Nokia buy time?

Just over one week ago as Nokia took to the stage to announce their new Windows Phone 8 devices, their stock value dropped 16% in a single day upon the news. To many of us, this was confusing if only because the devices themselves really seemed great—but the problem was (and still is) the uncertainty created by not announcing price and availability.

We had an excellent analysis of the situation by our own Chris Umiastowski and noted how this was probably temporary and not warranted.

Since that time, Nokia’s stock has slowly climbed back up but there was another hurdle in the distance: Apple’s iPhone 5 announcement. The anticipation was if Apple announced something truly groundbreaking—revolutionary instead of evolutionary—it would further damage perception of Nokia to investors. The iPhone 5 is already one of the top selling phones in the world and it just got way better? That’s bad if you’re betting on Nokia.

The good news is because expectations were high for Apple—perhaps too high—the company did not exactly ‘wow’ the tech media.  Wired nailed it with the headline: “The iPhone 5 Is Completely Amazing and Utterly Boring”.

Sure the iPhone 5 will still sell like gangbusters and Apple will reap the profits. Even their stock is up today about 2% showing investors are confident in yesterday’s announcement.

But two things happened:

  1. People were talking about the Lumia 920 a lot yesterday. It was often used as the benchmark to measure against the iPhone 5
  2. A window has opened up, allowing Nokia some breathing room to get these devices out to the masses

Could you imagine had Nokia waited until after the iPhone 5? All of that coverage yesterday would have omitted details of the Lumia 920 and some of its innovative technology. Instead, we have direct comparisons of hardware and design and the normally fawning media is not gushing over the iPhone 5.

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Nokia given some breathing room for release?

In turn, it appears that Wall Street may have given Nokia a pass on missing those dates and pricing. A second chance. Sure, investors are still leery of the company and whether they can turn around, but it appears that Nokia may be able to actually deliver a device more impressive than Apple’s (in terms of raw technology).

Personally speaking, we were worried about a stock bloodbath had Apple shown off something truly remarkable--something that company is clearly capable of doing. Remember the "Oh and one more thing..."? Investors sure do. Instead, the opposite happened and people felt good about Nokia. Not great, but there was some confidence.

Will Nokia’s stock continue to climb? It may. We think as Microsoft starts to reveal Windows Phone 8 more, as dates are announced and build up is created it will only help the company. Silence though is deadly.

WP Central

Make no mistake: execution here is everything. One misstep and people will look at Nokia like RIM. But if they nail it including early dates, powerful OS (with some unrevealed wow factors) and the right price, Nokia can do this yet.

And Nokia’s stock? It’s not really a measure of actual performance or value but it does play an important if illogical role in modern day market capitalism: perception.  For that reason during these tenuous times, it’s important to see how it trends. Back in July Nokia hit an all-time low of a $1.63, peaking at $3.25 a few weeks ago and then crashing back down to $2.20 after last week.

Today it closed up 6.91% at $2.94 a share.

Edit: As pointed out in comments, Nokia-Siemens is looking to sell of their business support systems (BSS) for $380 million with positive responses from interested parties. This combined with the partnership with China for the Lumia 920 is all good news, which helped rally the stock.

Related: Apple underwhelms with the iPhone 5. Here's why the Nokia Lumia 920 is better.;  App used in the above photo is 'Markets & Me'

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Comments

There are 62 comments. Sign in to comment

mreaglejr says:

i think sooner or later that will go much higher ;)

sholokov says:

I am a forex trader and I know it is going up. It is like clock work with these things. As soon as Nokia announces a date. Stock will initially go down so buyers can get a good price, and then it will shoot up. People will take partial profits. It will then come back down half way, so people can re-buy and that's when it will really go up. :)

tbonenga says:

It should be higher now. Didn't Apples go up over $9 yesterday.

sholokov says:

If market goes up first, then it is setting up for a down trend. Even if the trend is upwards, it still has to come down for at least a correction. Or when investors realize the truth.

inteller says:

gawd I wish I would have bought at $1.62....I'd almost double my money!

Crazy, right? 

tissotti says:

Not quite, but close.. $1.79. ;)
And put quite a bit on it thinking i'm a poor university student. 

arrow22 says:

I bought $10,000 worth of shares at that price... Virtual shares anyway. Haha, I think I'll look back and regret my cautiousness. It's still kind of neat to see a virtual pile of money flourish.

Murgatroyd7 says:

I bought real shares and I am quite happy that I did. I know I won't see a huge profit, but I expect to at least double my money in the upcoming months.

Mohamedrulez says:

Oh wow. Thats so funny.

hwangeruk says:

Moooohahahahah that is SOOOO funny. iSheep are so dense.
 

SocalBrian says:

Today's bump appears to be related to the rumor that they're looking to sell the Nokia-Siemens side of the business.
 
Yesterday, following the Apple announcement, Nokia stock actually went from positive territory to negative and closed down for the day (meanwhile Apple is up several percent following yesterday's announcement).

True and I should have mentioned that but it's also accurate that press today has been very favorable to them.

And forget the press, even on tech sites in comments, on Twitter, Facebook, the Lumia 920 is used as frequently as an alternative to the iPhone 5.

In short, since last week, the stock has slowly recovered after that 16% drop.

jabtano says:

This whole Nokia stock thing, $1.69 was the low point and if you had the cash and took a chance your going to be just fine, even when the stock hit $3.25 some weeks back if you had sold you fell just short of doubbling your money. if then took and bought at $2.40 you still made a good sum. Nokia just scored China largest carrier for the Lumia 920 12-14 months Nokia stock anywhere between $`12.00- 16.00 so long as they keep up the design they will be fine. better if the can swing getting the 920 on all carriers or more than just one per country they could really sell a boat load of 920's

mb-dape says:

Well, very missleading head line in your article then.

zacman says:

As soon as they sold NSN it is takeover time...

pbroy says:

I wish I could have bought 2000 shares, but I could only afford 1977. Had to choose between paying mortgage or buying more stock. :P

Paul Acevedo says:

Wow! You are not allowed to compare about game prices any more though... :-D

winbot says:

I don't know much about stocks, but, what would be the significance if you bought 2000 stocks rather than 1977? (besides the fact that you got 23 more stocks)

pbroy says:

At the current value of $2.94:
1977 = $5812.38
2000 = $5880.00
$67.62 difference
At the value of $12:
1977 = $23,724.00
2000 = $24,000.00
$276 difference
The more the stock goes up, the more the difference will show. I bought at $1.80. My profit already is $2253.78. If I cash out I will pay taxes of around %30

Ebaneeezor says:

Capturing the top cell provider in china today (680 million customers) has to be a good thing too.

BK-one says:

Bought several hundred shares when it was about $1.80. Hope it turns I to a nice down payment for a car in the next 3-4 years. We shall see.

Banstyle says:

I really hope WP8 gets released SOON and not LATE OCT while everyone is enjoying iPhone 5's and Samsung Galaxy III's all over the world. They really need to hussle, most people don't care to wait.

based_graham says:

Not everyone will buy an iPhone5 or a Galaxy S3. I predict Nokia's momentum to happen next year when they annouce their low-mid range devices. 820/920 is a great start.

wormy6 says:

Damn I was planning to buy some like 4 days ago but I never got around to it :-(  I don't think it will get down to 1.60 again anytime soon.

rocketboy says:

I'd imagine it'll go down again with the next earnings report, but either way it might be time to get a chunk of this action.
I really think people have started to think that the iPhone is growing tired. At least to those of us who follow this stuff.
Comic: http://chainsawsuit.com/2012/09/13/iphone-5/

aubreyq says:

LOL love that comic.

Wyn6 says:

I bought about 650 shares at $2.80 just to see what it would do. Looks good. But, the stock market as a whole was up to day. My MS stock and a few others were all green. Only one of my stocks hasn't budged. Also, Daniel, the stock actually hit a high of $3.25 about two weeks ago or so.

Forgot the exact number, will adjust thanks.

erzhik says:

Nokia has a fantastic chance to get some much needed marketshare, but knowing Nokia they will screw something up. MSFT not finishing WP doesn't help. We needs prices and availability ASAP while people are still negotiating whether to buy the iPhone 5 or not. Don't wait until 920 becomes irrelevant.

wpos8 says:

BlackBerry died already. Windows phone killed it. The funeral was last month lol...

Reeves says:

Great news, Daniel. But you forgot a key component of making this window count... In the US, at least.

Carriers. If the 920 can't get off ATT onto other carriers by early 2013 with a huge push, it'll stall. The next Gen of Android phones with huge specs will be announced at CES in January. BlackBerry will be firing all guns too. Window gets a lot smaller.

ZX9 says:

Not to sound like an idiot, but aren't a lot of things going up right now? Didn't Apple just make record highs? Anyway, I'm excited, but I'm cautious about being excited.

Not really, it was flat yesterday following the announcement, and then up 1.96% today. So up, but not amazingly so, and it dropped a lot yesterday morning.

wpos8 says:

This good news and glad bought 100 shares when it was just priced at low of $2.25

ScubaNitrox says:

GO Nokia GO!!! :-)

jake69 says:

oh yeah!...I'm making $50 for every penny it goes up. ;-)

texantony says:

Well, im not sure how their 3rd quarter earnings will be, but usually cell phone companies don't do too well between july and September. If that holds true, then you'll have another shot at buying some Nok stock at a decent price again.

Curtieson says:

I wish I had put the effort into figuring it out when it was under $2...but I didn't know how to really convert 401k money at my new broker into a singular stock.  Well, I figured it out and after the iPhone 5 release I got in for 725 shares @ 2.75.  Haven't figured out my sell point yet but I did this with a company a couple years back and made $10k in 6 months.  It is all 401k money so I'll lose it again at some point though before I am 65, haha.

jake69 says:

I did the same...I converted it into IRA. Than used the money to invest in stocks & mutual funds. So far so good. ;-)

hgary06 says:

It's the Federal Reserve turning on the printing press that made stocks jump. But I do believe Nokia will make a comeback. They are the only ones doing innovative things. They just need better commercials, seriously. And some star power.

Oh, yeah, sure... now that Apple has disappointed, everyone on Wall Street is like, "Hey, maybe they were onto something after all." Like having sex with an ex-girlfriend/boyfriend and waking up feeling guilty the next morning, because the person is a psycho.

eastbayrae says:

You're comparing a company with $600 bil+ market cap to Nokia? lol. It must be a slow news day.

bbqrooster says:

Did you read the article? Have you done any investing yourself? What is the objective of investing? Why is market cap has anything to do with this? Your ignorance really has shown through your comment.

Kredrian says:

Exactly, and many people are forgetting one thing. Nokia's stock is actually much more valuable right now than Apples.. yes, I said that. Why? Because as a few dollars a share, you can load up on a lot more shares than Apples 600$+ a share stock. Therefore you must consider ROI. If say Apples stock went from 650 to 652 dollars, your ROI would be about what? Like .003 percent? Whereas, if you buy Nokia at 2$, and it goes to 3$ you have a ROI of 50%. Yes, looking at it side by side, the apple stock is more impressive, but the potential for profit is much greater with Nokia.

abe321100 says:

What I realize since the announcement is that the IPhone is no longer being compared just to Android platform. Nokia pushed its boundaries and took risks, even though we don't know pricing and availability Nokia managed to introduced something unique something that we really haven't seen since the smartphone war that Apple started. That fact is, Apple is still number one , the IPhone 5 is gonna sell like crazy, but Nokia is in a position to make a dent in those sales and consumer choice is bigger than ever.

pulkit10 says:

I agree, people or at least the media are considering it to be a worthy contender now (nice to see spec sheets going up everywhere). Will the 920 outsell the iPhone or the SIII? Nope but it gets Nokia in the game and that's what really matters now.

Ticomfreak says:

Markets and me

kittshelby says:

does anyone know if it's a good idea for a college student to invest?  I don't know anything about stocks but I have a really good feeling about Nokia and I would really like to invest 1000 shares right now while it's still cheap (so around $3000).  I can easily churn out that money right now (i'm not poor).  I just want to know if this is a bad idea or not.  Thanks

Kredrian says:

I cannot speek for anyone else, and I am NOT offering investment advice. You only buy stock that you really feel will turn you a profit. While I am confident that eventually Windows Phone will take off enough that the stock price will rise well for Nokia, you have to realize that the stock rising from 1$+ to 3$+ will not necessarily happen every day; tomorrow it could go down, it could completely crash, you never know what it might do. Overall I am confident that Nokia is a good stock to buy and hold for the long term, but only time will tell. 

bbqrooster says:

Same disclaimer, I am not offering any investment advice, strictly my own opinion. Whether it is a good idea or not depends on whether you know what you are buying. You need to know how to value business and evalutate the risk/reward ratio. Some people even started investing when they are in high school. The other thing is never play with money that you need for your living and for emergency. If you are interested in Nokia, you should read up information about the company, and make some educated projection on its business in the coming years. Based on that projection, calculate what the stock price should be. After you have acquired the shares, you should monitor the company on whether it is going in the direction that you think. My advice to you is to start off slowly. You don't need to buy 1000 shares all at once. You can buy it a few hundred shares at a time until you get to your target of 1000 shares. Find a broker that allows you to buy smaller number of shares economically. Investing is a long game. You need to be patient.

Kredrian says:

They need to FLOOD the airwaves with advertising. TV, Radio, and internet. Get the word out. Show some video's of the 920 and what it can really do. Show it destroying the competition. Show people using it for everything from everyday boring things to exciting apps and experiences. They are losing the marketing war with both Apple and Android, without getting it out there they might as well give up.  I would really love for WP8 to take off, but it won't as long as thier is this perseption that its not as good as IOS or Android, and the best way to fight that is with agressive advertising.

favipx2@ says:

Yeah but the apps aren't really there. :'( anyone know if the gaming graphics getting better?

Mafiatounes says:

Gaming graphics will get better offcoarse since now WP8 has a S4 soc instead of the old S2 from Qualcomm. 
And more games and apps are coming since it is easy to port between W8 and WP8

xzigraz says:

I truly hope Nokia is reading this article. Nokia has show a lot of promises in the Lumia 920 and I am prepared to ditch my Nexus and get this, fingers crossed that it comes out soon.

Curtieson says:

Up over 3 now, 3.11 as of posting, haha.  I jumped into this for the long term, $10 or more, but shoot...if we reach $5 by October I might sell out!

Xaphoon148 says:

Nokia up 5.86 (Nordic)

Racxie says:

What app is that in the screenshot?