nt

Rumor has it that Nortel Networks (OTC: NRTLQ) will sell its enterprise division in the near future.

This would be part of a broader plan to break the company apart instead of trying to restructure its way out of bankruptcy. The company is planning to sell its CDMA and LTE wireless businesses to Nokia (NYSE: NOK) for $650 million -- the first unit sale since the January bankruptcy filing.

Motorola (NYSE:MOT) may be the next large American technology company to go into bankruptcy. Telecom equipment maker Nortel, which has several related businesses, filed for Chapter 11 yesterday.

Motorola has two successful divisions. One of these makes home electronic devices including set-top boxes. The other provides telecom infrastructure to large enterprises and governments. Each of them has had positive operating income over the last several quarters.

Motorola's handset division, however, is taking on water quickly. It will cut another 4,000 people this year. It was going to be spun off from the rest of the company, but its sales fell so quickly that the option was killed. Now, a bankruptcy judge may do what the company would not -- liquidate the handset business completely.

cIn the News:
The Biggest Insurance Scheme of All Time?
UnitedHealth Group, one of the country's largest insurers, settled what may be one of the largest health insurance schemes of all time on Tuesday after allegedly cheating sick patients out of hundreds of millions of dollars. And it probably would not have happened without Mary Jerome, an advanced-stage ovarian cancer patient who finally just said "enough" after getting hit with $46,000 in medical bills – even though she had top-notch insurance coverage.
http://www.cnbc.com/id/28643259

I have stated numerous times that in our system of capitalism, killing a company is almost impossible to do. It just doesn't happen very often, especially with older companies with deep roots.

Years of losses, shrinking markets, and a failed business strategy matter little. If there is a will, there is a way. Until the credit crisis in November, there was always a way to raise needed capital to keep the dream alive.

A great example of this is Nortel Networks Corporation (NYSE: NT). The giant telecommunication networking firm was a darling for investors during the dot-com boom. In early 2000, the stock peaked at close to $1,000 per share on a split adjusted basis.

As the crash unfolded, NT collapsed. By the end of 2002, NT was a stock on life support and trading for pennies a share (pre split). At the time, the company was bleeding cash and facing an entirely different market for its products and services.

Nortel Networks Inc. (NYSE: NT), which has been floundering for years, put itself out of its misery today by filing for Chapter 11 bankruptcy protection.

According to court papers filed in U.S. Bankruptcy Court in Delaware, the Canadian telecom equipment maker owes bondholders $3.8 billion and was facing $107 million in interest payments this week. The company already was facing de-listing from the New York Stock Exchange. It has a $2.4 billion cash position.

Amidst all of the usual hopeful spin in the company's press release was this telling sentence: "The company commenced a process to turn around and transform Nortel in late 2005, and the company made important progress on a number of fronts."

That's right folks, Nortel has been in a turnaround since 2005. Then again, Nortel is not a typical company. Former Chief Executive Michael Dunn, former Chief Financial Officer Douglas Beatty and former Controller Michael Gollolgy are facing charges in Canada for manipulating earnings in the early part of the decade. Shares of Nortel hit $900 on a split-adjusted basis in 2000.

Sirius XM Radio (NASDAQ: SIRI) shareholders approved two proposals: The first, to issue up to 3.5 million more shares, increasing the number of common stock from 4.5 million to 8 million. The second, to enact a reverse stock split by a ratio of not less than one-for-ten and not more than one-for-fifty.

Sirius faces delisting from the Nasdaq as its stock has traded below $1 since September 19. It was given a grace period until the end of January. With the reverse stock split, the satellite radio company will try to spruce up its battered stock price, avoid delisting and also pay down debt.

I doubt this will help. The problems at Sirius are great and have been exacerbated by the current economic slowdown and an auto industry in shambles. The 13.5 cent stock price reflects investor concerns. Sirius is unprofitable and has a large debt load of $1 billion, due in part in February. It also didn't have positive cash-flow for a full-year to date, but predicts breakeven cash flow in 2009, and positive cash flow in 2010.

It definitely looks like M&A activity will decline in 2009. What's more, it appears that private financings and public offerings will continue to remain lackluster.

This is bad news for investment banks. However, some of these operators are finding ways to maneuver around by focusing on restructuring work.

Perhaps one of the biggest beneficiaries is Lazard Ltd (NYSE: LAZ).

In fact, this week the firm snagged Timothy R. Pohl, the co-head of restructuring practice at Skadden, Arps, Slate, Meagher & Flom.

Pohl will certainly be busy as Lazard is currently working on the bankruptcies of Lehman Brothers and VeraSun.

This week, Lazard also got several new plumb assignments. The firm is advising Nortel Networks (NYSE: NT) on restructuring options, and other new clients include Tribune and even the United Auto Workers.

Of course, with the protracted credit crunch and the declining global economy, we'll likely see more leveraged companies hitting the wall, providing much more business for Lazard.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

The New York Stock Exchange has told Nortel (NYSE: NT) that it may face being delisted. According to The Wall Street Journal, the telecom equipment firm will get kicked out "if it cannot bring its share price above the required $1 minimum in the next six months."

Delisting has a lot of problems beyond humiliation. Companies traded on the pink sheets or bulletin board cannot be held by most institutional investors. Stocks that trade in the pennies often face wild price swings as day traders bounce them around.

Who would have thought it would come to this? Many of America's most famous public companies could be up against being booted from the two major stock markets. The list is very long and it includes Sirius XM (NASDAQ: SIRI), Fannie Mae (NYSE: FNM), Ford (NYSE: F) and AIG (NYSE: AIG). The first two have already been below $1 for a fairly long period. AIG and Ford have gotten close.

What can be done? The current market drop, seen through the eyes of the exchanges, is an emergency. NYSE and NASDAQ face losing some of their signature listings, but they have an option. They could simply suspend some of their rules and allow companies to stay listed even if they do not meet the current requirements. The modification could be set for a year, at least initially.

If the exchanges alter the rule to keep some of their listed companies, who gets hurt? Probably no one. Rather, the firms in trouble and their shareholders get helped.

Douglas A. McIntyre is an editor at 247wallst.com.

Stocks fell today as financials were hit hard after a report from UBS predicted losses in the banking sector again in 2009. Jamie Dimon's interview comments didn't give any massive confidence boost either. This was the first day that there was a major move to the upside in what feels like forever, as oil was up $3.49 per barrel at $47.01 on last look. Today's weekly jobless claims data was also the worst we have seen in this part of the cycle.

Here are today's closing bell levels:
DJIA: 8,565.09 (-2.24)
S&P 500: 873.58 (-2.85)
NASDAQ: 1,507.88 (-3.68)

52-Week Lows

Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) announced that the US FDA gave feedback on the DURATION-1 study for once/week diabetes treatment that will allow it to file a new drug application later in the first half of 2009. Shares were up 19% at $10.18 right before the close.

Costco Wholesale Corp. (NASDAQ: COST) beat earnings with $0.65 EPS vs. $0.62 estimates. Revenues were a tad light. The company said its sales were hurt by a slowdown in non-food discretionary sales and related reductions in margins associated with these sales in the latter half of the quarter.

Nortel (NYSE: NT), the communications equipment maker, is one of the largest companies in Canada. Like a lot of other firms that have a balance sheet full of debt, it will try to restructure what it owes to its creditors. If that doesn't work, it is looking at going into Chapter 11 and a lot of those creditors will not get what they were expecting when they made their loans in the firs place.

According to The Wall Street Journal, "The move comes as the Toronto-based company grapples with plummeting sales for its wireless gear and as the credit crunch hobbles the sale of key assets."

The news is telling. Being in the wireless business used to be a great position. Cellular systems were expanding rapidly. In many cases handsets were even replacing landlines. The opportunity for growth seemed nearly limitless.

But there have been signs that even a hot industry like wireless can be undermined by a recession. Nokia (NYSE: NOK) has warned that handset sales will be down next year. Global growth may slow to nothing even when emerging markets like China and India are figured in. Not so long ago, companies like Nortel and Alcatel-Lucent (NYSE: ALU) had reasonable prospects even if they were going through period of cuts to save costs and make product development and marketing more efficient.

The wireless business was considered one of the most significant global growth industries. Until recently that is.

Douglas A. McIntyre is an editor at 247wallst.com.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Agilent Technologies Inc. (NYSE: A) topped estimates but offered an outlook below expectations.
• Best Buy Co. (NYSE: BBY) warned that it many not be able to maintain its earnings momentum.
• Charlotte Russe Holding Inc. (NASDAQ: CHIC) was upgraded because of its growth potential.
• Focus Media Holding Ltd. (NASDAQ: FMCN) shares tumbled after it reported Q3 numbers.
• HLS Systems International (NASDAQ: HOLI) earnings prospects and management impressed an analyst.
• JCPenney Co. Inc. (NYSE: JCP) reported a lower Q3 profit and lowered its guidance due to the recession.
• KKR Financial Holdings (NYSE: KFN) disappointing Q3 results led to analyst downgrades.
• MercadoLibre Inc. (NASDAQ: MELI) doubled its Q3 profit and beat earnings expectations.
• Nortel Networks Corp. (NYSE: NT) swung to a Q3 net loss and unveiled further restructuring measures.
• Perry Ellis International Inc. (NASDAQ: PERY) posted preliminary Q3 results and lowered its outlook.
• Siemens (NYSE: SI) Q4 net loss widened and it warned about meeting its profit target for the year.
• Starbucks Corp. (NASDAQ: SBUX) Q4 earnings were hurt by restructuring costs, revenue rose slightly.
• Toll Brothers Inc. (NYSE: TOL) posted dismal Q4 results and declined to offer guidance for next year.
• Tyson Foods Inc. (NYSE: TSN) solid Q4 results fell short of estimates and it offered a shaky outlook.
• Wells Fargo & Co. (NYSE: WFC) earnings prospects following its equity offering led to an analyst's upgrade.

Today started out looking like a great Monday after the Chinese announced a $586 billion stimulus package. Unfortunately, some of this was already in the works and many doubt its projected 8% to 9% growth for 2009 can stave off a recessionary environment ahead. Bonds closed early ahead of Veteran's Day, and are not trading Tuesday.

Here are the unofficial closing bell levels:
52-week lows
Top Upgrades & Downgrades
Solar Downgrades

American Capital, Ltd. (NASDAQ: ACAS) got killed after three major announcements: -$2.63 EPS, a $158 million acquisition, suspension of its dividend. Shares were down over 43% at $7.75 to a new multi-year low right before the close.

American International Group (NYSE: AIG) got a larger lifeline as the old $85 billion package grew to $120+ billion and then to $150+ billion, with some $40 billion coming from the TARP funds at better terms. Shares came off with the market at the end of the day, but were still up 9% at $2.30 right before the close.

U.S. stock futures were higher Monday morning, indicating stocks could rise at the open after China Sunday announced a $585 billion stimulus package, which includes tax cuts and infrastructure spending. This cause world markets to climb as well as commodities. Oil followed stock markets and jumped above $64 a barrel. Another boost to stocks was further aid from the government to AIG.

[Update 8:25: Circuit City Stores Inc. (NYSE: CC) filed for bankruptcy. Shares are down 52% in premarket trading to 12 cents.]

American International Group (NYSE: AIG) -- The government on Monday provided new financial assistance to the troubled insurance giant, including pouring $40 billion into the company in return for partial ownership. Altogether, AIG got around $150 billion. AIG shares are shooting up over 21% in premarket trading.

General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F) and Chrysler are also moving closer to a bailout as Obama's chief of staff, Rahm Emanuel, called the industry an "essential" part of the U.S. economy. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid said that the administration should consider expanding the $700 billion financial industry bailout to include car companies. With this kind of support, still undecided is the size and timing of any aid. GM shares are up 2.3% (it was hit by a downgrade from Barclays) and Ford shares are up nearly 5% in premarket trade. [Update 9:10: as expected, with the GM downgrade, it is down over 10% in premarket trading, Ford is only slightly down thought]

NRG Energy Inc. (NYSE: NRG) on Sunday rejected an unsolicited $6.1 billion all-stock bid from nuclear power giant and utility operator Exelon Corp. (NYSE: EXC), calling it too low. NRG shares jumped 6.8% in premarket trading.

Once again world markets sank on recession fears, and once again U.S. stock futures plunged, indicating the session may start on a considerable down note. But if Friday futures reached limit-down to stop trading and many feared the worse, that didn't materialized and the Dow fell "only" 3.6%. Today, oil dropped below $62 a barrel as the G7 expressed concern over the yen and the IMF announced rescue plans for Hungary and Ukraine.

A little after the market opens, investors will look at data on September's new home sales. On Tuesday, a two-day meeting of the Federal Reserve begins, and many expect another coordinated rate cut from the world's major central banks. The Fed is expected to lower its fed funds rate by a half-point to 1 percent on Wednesday.

Verizon Communications (NYSE: VZ) reported 66 cents earnings per share this morning, inline with estimates on strong sales.

Goldman Sachs (NYSE: GS) -- the Financial Times reported Goldman's CEO Blankfein called Citigroup (NYSE: C)'s CEO Pandit last month to discuss a merger. While Pandit immediately turned down the suggestion and any further discussion on the matter, the news is making investors realize the severity of the financial crisis that Goldman was willing to lose its independence.

Stock futures dropped sharply Monday morning after the bailout plan was revealed Sunday and several banks in Europe were bailed out. U.S. investors are expected to react similar to stock markets around the word, which tumbled Monday following Washington's $700 billion bank bailout deal. The bailout may not be enough, and it will take a while to clean up the mess and restore confidence to financial markets. The economic reading due to be released today, August personal income and spending is not expected to affect markets much.

Three major banking bailouts were announced in Europe. 1) The Dutch-Belgian bank and insurance giant Fortis failed and was provided with a $16.4 billion lifeline by the governments of Belgium, the Netherlands and Luxembourg. 2) The British government nationalized mortgage lender Bradford & Bingley -- the second British bank to be taken under government control this year. 3) A consortium of German banks and regulators bailed out Hypo Real Estate Holding AG, in a deal worth billions of dollars.

Wachovia Corp. (NYSE: WB) - after WaMu's failure, the focus has shifted to Wachovia and at least two major banks, Citigroup Inc. (NYSE: C) and Wells Fargo & Co. (NYSE: WFC), were reportedly in talks Sunday to buy it. Wachovia shares are trading down 60% to $4 in pre-market action. C and WFC shares are down over 6.5% and 3.5% respectively in pre-market trade.