Soon after news of the Nokia Microsoft transaction got out the investors reacted and this saw Microsoft share dipping by 5.2%.
To those who understand business, such a move is a vote of no confidence to Microsoft. The reason being Microsoft is buying a loss making unit for 7.2 billion bucks and as part of the deal Microsoft is also inheriting the more than 30 000 strong Nokia work force meaning low revenue per share to Microsoft.
On the other hand investors have finally approved of Nokias move of jettisoning a lose making unit and they happily rewarded Nokia by buying more shares which led to a phenomenal rise by 47 percent in the share value.
As an aside, this deal shows how poverty riddled Zimbabwe is with all this Zimbabwe has got diamonds nonsense. Imagine, our yearly budget as a country barely scratches $3 billion yet a loss making unit is bought for $7 billion. Zimbabwe, no Zimbabwes leadership need a reality check and. Imagine a single company Samsung makes all of $15 billion in profits and thats just one company in South Korea and Zim brags about diamonds that hardly contribute $100 million per year to the fiscus
End of aside.
Well back to the Nokia issue, I think Microsoft won’t do much to turn the fortunes of Nokia around.