Nortel Takes a Plunge

The plunge is not some new venture but Nortel’s stock price. Friday’s close has their stock down by 15% on a flat 2Q earnings report. The importance of this I will get to in a minute. But first here is the 5 day action last week. –

The consideration? Cisco and Nortel are infrastructure vendors. They have retail presence of course, but the main body of their income streams is selling to corporations. When corporations stop investing due to lessened consumer demand companies like Cisco and Nortel feel the draft. It will be interesting to compare Cisco’s 2Q results.

Now were I a smart Muni looking for a Wifi/Wimax supplier I would be tapping both these firms. They’re going to be hungry and will sweeten the pot and lower their prices. Just like the housing market now is the time to buy network infrastructure.

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