More Hell As Nortel Races To Zero

Telecom powerhouse, Nortel, is facing a devastating series of punches, can it recover?

The Wall Street Journal reported that Nortel has sought Bankruptcy advice in the event that it is unable to complete restructuring plans.  Stock price promptly plummeted (trading at press time in the 22 cent range).

That would have been bad enough, but now Nortel has received a delisting warning from the New York Stock Exchange (NYSE), that they must bring their average share price above $1 within the next 6 months or face being removed from the NYSE.  All of this framed by a recessionary economy and a sudden drop in sales.

This has been a difficult year for Nortel and other traditional phone system manufacturers, but it was a fantastic year for cheap open source phone systems systems from Asterisk and FreeSwitch.  IT departments are becoming increasingly comfortable with the features and flexibility of open source systems especially given tightening budgets.

Will Nortel be able to pull a rabbit out of the hat?  Or will they fall victim to the changing economy, consumer fear, inexpensive open source alternatives, and possibly a bankruptcy court?