By now everyone has probably heard the news that Nokia (NYSE:NOK) is down…way down. Disappointing projections for Nokia’s second quarter forced shares down 18% in less than twenty-four hours. But then out of left field came Microsoft‘s (NASDAQ:MSFT) rumored $19 billion deal to buy Nokia’s phone unit, or so it’s been tweeted. The news of the possible deal is everywhere after Russian mobile blogger Eldar Murtazin hinted at it on Twitter.
Nokia, currently undergoing major product changes in order to make their phones compatible with Microsoft’s Windows Phone Model smart phones, was quick to call the claims “baseless”, drenching the immediate uptick in share prices that resulted from the news, and closing the day down 4.57%, continuing to fall in after-hours trading, for a 2-day drop of 19.37%.
While it might seem absurd to heed a tweet, the news had people all atwitter today. First people rushed to buy the discounted stock only to find that the deal is at most very unlikely — or is it? With Nokia’s (NYSE:NOK) figures so far down, and continuing to slip, they need something to pull them back up on their feet. A deal with Microsoft (NASDAQ:MSFT) would certainly do that. But instead of allowing the rumors to bolster shares, Nokia denied them outright, only pushing their stock further down to a 10-year low. One would only hope that Nokia is just choosing to keep the deal secret, because if it really is unfounded as they would have us believe, the smart thing to do would have been to allow the rumors to push up share prices.
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