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Nokia shares slump again

Nokia shares slump again
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Investors continue to dump Nokia for most of Wednesday after its profit warning. At one stage its shares were down another 10 percent, on top of Tuesday’s almost 18 percent fall and volumes of shares being traded were nearly three times their recent daily average. The stock did recover sharply to close just 0.8 percent lower at 4.71 euros on talk of the buyout.

Analysts said the main concern is that Nokia may not be able to reclaim market share after it changes to Microsoft’s Windows software later this year.

Nokia said on Tuesday that mobile phone sales in the second quarter would be “substantially below” its previous forecast and abandoned its full-year outlook, blaming difficult conditions in China and Europe.

The company is moving to Microsoft software from its own Symbian platform as part of an overhaul of its phone business set out three months ago by new Chief Executive Stephen Elop.

“We would continue to avoid the stock as Symbian smartphone sales are falling off faster than expected and we are sceptical that new Windows Phone models will be able to replace lost profits,” said Gleacher & Co analyst Stephen Patel.

The company said tough competition from Apple and Google Android powered phones as well as lower-end handset makers were driving down its sales and selling prices.