Nokia Corporation (ADR)(NYSE:NOK) has been going through quite a financial crunch. The company, which was once at the top of its game as one of the biggest providers of mobile phones throughout the world, has not managed to stay up in the competition, and after being overtaken by most companies, Nokia has to cut costs to keep up with the finances. The company has already sold off its central headquarters building, in order to save up on money. Job cuts are also being done in order to try and operate with the little they have left. The most recent decision has been, to sell off convertible bonds worth 750 million Euros.
The company wants to manage the dwindling finances as carefully as possible. There are debts which are about to mature, and the company needs a certain amount of liquidity, for which it needs the money. This decision though, has not gone down very well in the stock market. Shares of NOK fell 13 cents to $2.68 in Tuesday's session.
The CFO of Nokia said that this is the correct time to make such a move, since the market for convertible bonds has immense possibilities. Timo Ihamuotila, the CFO, also said that the financing opportunities need to be looked at prudently, and the company needs to take proper advantage of these opportunities.
Analysts are saying that the company is not under Under Perform. They are of the opinion that Nokia is trying to buy some time by doing what they are doing. There needs to be concrete answers and solutions. The predictions for the shares are also decreasing, and the liquidity prospect is not being looked upon without skepticism. Nokia, meanwhile, introduced the Lumia 510, which is a smartphone currently exclusive to China, South America, India and Asia-Pacific countries. The phone will run on the Windows 7.5 operating system, instead of the newest upgrade. The reason being, the recent upgrade requires very high specs, which are not affordable all the time.