Nokia stock up 35 percent today; Microsoft stock down 5 percent

As expected, Nokia's stock price is soaring on the news that Microsoft will acquire much of the company for $7.17 billion, including its Lumia and Asha smartphone business. Nokia is currently trading at over 35 percent on the NASDAQ stock market today.

At the same time that Nokia's stock value is going up, Microsoft is taking a hit as its shares are down over 5 percent. Basically, the Nokia buyout news removed any gains that Microsoft had generated in its stock price following the reveal less than two weeks ago that Microsoft's current CEO Steve Ballmer will be retiring sometime in the next 12 months.

In addition to buying the smartphone hardware business, Microsoft will also acquire a long time license to Nokia's patents and the use of its HERE mapping services.  Nokia will still run a number of other business divisions once the deal is closed in the first quarter of 2014. Earlier this morning, Nokia held a press conference to offer up more details on the Microsoft deal and it was clear that Nokia officials felt that this was the best more for the company financially. At the same time the decision to sell off much of its divisions was a hard and emotional one to make.

Finland residents are also feeling the effects today, including Alexander Stubb, the country's Minister for European Affairs and Foreign Trade. In a Twitter post this morning, he said:

 

Stubb posted another message later stating that he felt that it was important that the jobs that are involved in Microsoft-Nokia acquisition "remain intact".

Source: NASDAQ | Image via Yahoo

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22 Comments

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Nokia goes up, Microsoft goes down. Since now they're basically the same, in the end it all stays the same. Am I right?

xankazo said,
Nokia goes up, Microsoft goes down. Since now they're basically the same, in the end it all stays the same. Am I right?
Correct. Stagnant.

neonspark said,
lol @ the nokia haterz they must be applying some burn ointment because it HURTS!!!

I am truly mystified at your comment. Nokia "haters" have more to celebrate, as this marks the END of Nokia in consumer handsets. They still have maps, and they still have their networking business, but they won't be making ANY consumer products...and won't for years under the terms of the sale.

Also, the drop in Microsoft makes sense - after all, it is the acquiring company. Do the stocks of Verizon and Vodaphone show the same sort of shift? They should - Verizon being the acquirer, and Vodaphone the seller. Even though this is a straight unwinding, it's still an acquisition for corporate purposes (from Verizon's end) and a sale (on Vodaphone's end).

Spicoli said,
Why specifically would they do that?

Why do you specifically not understand sarcasm? Come on! He was being sarcastic because everyone seemed to blame PC sales on Windows 8, so why not blame every other bad news on Windows 8. Sigh.

Remember the deal doesn't close for another 6-9 months, so this investors feeling confident about future profitability, not current.

warwagon said,

But usually not 35% in 1 day

In the case of acquisition they do because everyone is guessing what they buyout price will be. It can be a quick way to make a profit.

Yes but go back to the original comment. It says they go up AND down. Acquisition stocks go up and that comment points to being about all stocks, not just acquisition stocks.

Actually, in relative terms, they are doing well. Their last quarter still showed a loss, their losses have been steadily increasing. At the current trajectory, they should show a profit in Q1- first time in ages.

The problem is most of that is due to cash coming from Microsoft so it really isn't their own doing. Regardless, they are not doing 35% good.