Nokia wrings out short sellers
03 September 2013 Helsinki
Image: Shutterstock
Nokia has struck a $7.2 billion deal with Microsoft to strengthen its position in the smartphone market, in a move that has inspired panic among short sellers.
Microsoft will acquire an extensive portfolio of patents for $2.2 billion and will pay $5 billion for all of Nokia’s cellphone units. Nokia has struggled to gain a foothold in a smartphone market that Apple’s iPhone has dominated.
It has also faced fierce competition from the manufacturers of Android devices, including Motorola Mobility, which was bought by Google in 2012 for $12.5 billion.
The news came as a surprise to many, with demand for the stock forcing the share price to rise 40 percent as short sellers rushed into the market to cover their positions.
Data provided by Markit Securities Finance shows that Nokia stock is heavily borrowed, with 11.9 percent of its shares out on loan (based on trades which settled on 30 August).
Even though short interest has come down from a high of 21 percent, the stock is still one of the most shorted in Europe, added a spokesperson at Markit.
Microsoft will acquire an extensive portfolio of patents for $2.2 billion and will pay $5 billion for all of Nokia’s cellphone units. Nokia has struggled to gain a foothold in a smartphone market that Apple’s iPhone has dominated.
It has also faced fierce competition from the manufacturers of Android devices, including Motorola Mobility, which was bought by Google in 2012 for $12.5 billion.
The news came as a surprise to many, with demand for the stock forcing the share price to rise 40 percent as short sellers rushed into the market to cover their positions.
Data provided by Markit Securities Finance shows that Nokia stock is heavily borrowed, with 11.9 percent of its shares out on loan (based on trades which settled on 30 August).
Even though short interest has come down from a high of 21 percent, the stock is still one of the most shorted in Europe, added a spokesperson at Markit.
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