Telecom gear maker Nortel’s (NT) downward spiral continues: The company filed for Chapter 11 bankruptcy protection in Delaware today. Nortel owes companies more than $3.8 billion, according to court filings, the WSJ notes.
What happened to Nortel? The company hired former Motorola exec Mike Zafirovski more than three years ago to turn things around after a huge accounting and management mess.
But since then, Nortel has fumbled, focusing at different times on wireless equipment, large-scale ethernet buildouts, office phones — including a high profile partnership with Microsoft (MSFT) that seems to have led nowhere, etc.
More recently, Nortel’s telecom carrier customers have cut spending as the economy has soured. And asset sales haven’t worked out as planned.
Hat tip to RBC analyst Mark Sue, who predicted the bankruptcy back in November, cutting Nortel’s price target to $0. That day, the market sent Nortel shares up 32% to $0.78. But today, investors are bailing on Nortel, sending shares down 77% to $0.07, an all-time low. (Nortel’s split-adjusted share prices from 2000 — more than $800 — look even more out of place today.)