Nokia stock closes up 31% after announcement of acquisition by Microsoft

posted by Michael H. / Sep 03, 2013, 5:31 PM

Nokia stock closes up 31% after announcement of acquisition by Microsoft

The outlook for Nokia was pretty grim yesterday, with one analyst saying that the company was looking at a "disastrous third quarter". Then, everything changed when Microsoft announced that it would purchase Nokia's Devices and Services division for $7.17 billion (including patent licensing). So, it's really no surprise that today was a huge day for Nokia stock.

Right out of the gate, Nokia's stock skyrocketed. At its peak today, the stock was up 45% from yesterday's closing price of $3.90 per share. At the end of the day, Nokia's stock closed up 31% at $5.12 per share.

Given that investors and analysts were calling for Nokia to make more cuts and streamline the business, at least part of this bump has to be attributed to the fact that Nokia's business will be far more streamlined once this deal goes through. Nokia is holding on to its HERE navigation products, its Nokia Siemens Networks, and its patents and development unit. 32,000 employees are being shifted over to Microsoft as well. That's a big restructuring.

Of course, getting $7.17 billion doesn't hurt either.

source: Google Finance

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27 Comments

1. Kishin

Posts: 706; Member since: May 30, 2013

Okay I understand This Means MS is helping Nokia not total changing it and it will help bring better business and better products faster

posted on Sep 03, 2013, 6:03 PM 9

15. ushoda

Posts: 76; Member since: Aug 17, 2011

no, cause nokia no longer exist as a mobile phone company :C

posted on Sep 03, 2013, 8:58 PM 2

23. james004

Posts: 486; Member since: May 15, 2013

so why are people buying nokia share? :s that company just sold all its assets, only thing it has remaining is the HERE maps :/

posted on Sep 03, 2013, 10:26 PM 0

27. microsoftnokiawin

Posts: 1268; Member since: Mar 30, 2012

help me keep the nokia brand alive pelasehttp://www.change.org/en-AU/petitions/microsoft-nokia-keep-the-nokia-branding

posted on Sep 04, 2013, 3:15 AM 0

18. rusticguy

Posts: 2828; Member since: Aug 11, 2012

MS Embraced, Extended and then "Exterminated" as usual. M$ never helps.

posted on Sep 03, 2013, 9:24 PM 0

20. veer.d

Posts: 89; Member since: Jul 12, 2013

even with wp8 Nokia try to produce affordable smartphone like L520 now its not going to happen because microsoft just focus on profit margin MS will try to monopolize the mobile market like it did with PC.

posted on Sep 03, 2013, 9:30 PM 1

2. Googler

Posts: 813; Member since: Jun 10, 2013

Nokia sells of their smart phone production and their stock goes up, not really sure that makes any sense. Seems like MS stock should have soared, they just purchased the Lumia line and all the staff that created it.

posted on Sep 03, 2013, 6:10 PM 2

11. Commentator

Posts: 3722; Member since: Aug 16, 2011

It makes sense because the portion that MS bought had been turning a loss. I'm not sure about the financials of HERE, NSN, and whatever else is left of Nokia, though.

posted on Sep 03, 2013, 8:10 PM 3

14. Googler

Posts: 813; Member since: Jun 10, 2013

I look at it from the perspective smart phones are replacing feature phones at an increasing rate, and Nokia just sold their smart phone lineup. If Nokia has plans for a new smart phone, it's a win win for both them and MS, Nokia gets the bucks and MS gets the ability to make their own phones. Not sure if I'm convinced Nokia has a new smart phone lineup in the works though.

posted on Sep 03, 2013, 8:44 PM 0

3. sipha

Posts: 439; Member since: May 12, 2012

Mmmh... am confused, these articles seem specific.. If Microsoft is buying Nokia's Devices and Services division, what other division is there?? Like why dont they just say microsoft is buying nokia??

posted on Sep 03, 2013, 6:14 PM 0

5. freebee269

Posts: 541; Member since: Aug 10, 2012

Microsoft bought Nokia devices unit and the rights to use its patents for 10 years. If you think this is all that Nokia is then you don't know much about Nokia.

posted on Sep 03, 2013, 6:44 PM 5

4. papss unregistered

So they didn't get the phone patents? I also see Michael had to put his doom and gloom in there as usual.

posted on Sep 03, 2013, 6:36 PM 0

19. rusticguy

Posts: 2828; Member since: Aug 11, 2012

No. Patents are licensed. How can they get patents when Nokia makes a bilion/year from them.

posted on Sep 03, 2013, 9:26 PM 0

6. Seo_Joo_Hyun

Posts: 65; Member since: Jul 14, 2013

I really hope we see the beautiful nokia design and innovation that nokia has to offer after this acquisition

posted on Sep 03, 2013, 6:46 PM 9

7. Kishin

Posts: 706; Member since: May 30, 2013

I fell the same way

posted on Sep 03, 2013, 6:49 PM 3

17. PAPINYC

Posts: 2315; Member since: Jul 30, 2011

You fell? Are you okay??

posted on Sep 03, 2013, 9:24 PM 0

24. Kishin

Posts: 706; Member since: May 30, 2013

I am not okay and i almost crashed because hearing that Nokia was purchased by MS

posted on Sep 03, 2013, 10:42 PM 0

26. Seo_Joo_Hyun

Posts: 65; Member since: Jul 14, 2013

i cried :(

posted on Sep 04, 2013, 1:50 AM 0

8. papss unregistered

If they are smart they will let them do what they need to do.. Material wise m$ makes great products IMO but lets see if they let them work the way they did with the Skype folks.

posted on Sep 03, 2013, 6:52 PM 1

9. papss unregistered

Now m$ needs to buy bb to complete their patent folder

posted on Sep 03, 2013, 7:30 PM 3

10. UrbanPhantom

Posts: 949; Member since: Oct 30, 2012

Nokia is doing the same thing that Ericson did with Sony: sold MSFT their phone division, and in doing so got rid of their debt, whilst keeping the profitable network (NSN) and mapping divisions (HERE). That means Nokia can start making money again, and that Microsoft now produces both feature and smartphones (Lumia). None of this is particularly surprising, given that Elop was intimately tied with Microsoft before, although Nokia share-holders still have to agree to the deal in November. Unless Apple, Google, or some other entity decides to make a counter bid for Nokia, Microsoft will have the opportunity of getting access to hardware technology and patents for almost half the price that Google paid for Motorola Mobility. It may work out well for Nokia shareholders, though, if NSN is able to become routinely profitable, and HERE should fetch customers also who are left in the dark by being opposed to Google (i.e. Apple, Microsoft). It's the end of an era for Nokia, and the start of something new for Microsoft, but never count softy out of the picture. They still have 60+ billion in the bank, and that will take a long time to exhaust. Also, Chrome OS has been unable to make any serious inroads thus far, and people are still using laptops and desktops for business and education. That means Microsoft probably won't dissappear any time soon...

posted on Sep 03, 2013, 7:45 PM 1

12. JulianGT

Posts: 89; Member since: Oct 15, 2012

Did they also buyed their ahsa line-up?

posted on Sep 03, 2013, 8:13 PM 2

13. Credo

Posts: 749; Member since: Apr 19, 2012

Yeahh ....

posted on Sep 03, 2013, 8:24 PM 0

16. Alex123

Posts: 241; Member since: Oct 17, 2012

I hope to see Nokia making own new smartphone (if possible) with android. I'll be always with you, Nokia. Make new smartphone with android please

posted on Sep 03, 2013, 9:16 PM 2

22. kindlefireowner

Posts: 504; Member since: Dec 05, 2011

Give it a rest. It's never going to happen. Nokia can't release any phone with their name on it until 2016. Even then only feature phones.

posted on Sep 03, 2013, 9:59 PM 2

21. lumialove

Posts: 75; Member since: May 16, 2012

68. lumialove posted on 11 hours ago 1 Guys, I don't know what to say on the new 'Microsoft - Nokia' partnership. Nokia, to be honest failed in creating challenging and capable smart phones and that lead to the fall of the giant. Apple, Samsung and Sony evolved very well when the market asked for better innovations. If, with the guidance of Microsoft, Nokia could come up with really stunning smart phones and tabs powered by Windows8, trust me, there is a real market for them for sure. First and foremost, people are getting bored with Andriod and wants a change. After Steve Jobs, Apple is not that tastier too [Dont know about 5S] ! So, its the perfect time for a revenge ! :) All the best duos