Summary
1. A company on the brink of bankruptcy has to understand that unless it pulls the trigger on a relatively good deal, it will get far less later on. 2. The Nortel/Alteon transaction is a case in point. 3. Reportedly, it could have received double or triple the amount for the equipment business.
Analysis
One gets the feeling that Nortel still believes the telecom world still revolves around itself. Telegraphing publicly, in the past, its intentions to sell off certain businesses partly had to do with hubris – because it was not smart at all from a negotiations point of view. And then, recently, Nortel went to the trouble of announcing that its Metro Ethernet Networks operation is no longer for sale. That only compounds the impression that the supplier is not getting the offers it believes that it deserves. It is almost like a conceited politician holding a news conference and announcing, “I am not running for president of the United States.”
Some of the Nortel high-level executives were awfully smug for years that the vendor could do no wrong. There was a tremendous amount of negative pressure placed on industry analysts that were critical of the corporation. Even to this day -- do not hold your breath for any mea culpas.
