Nokia Corporation (ADR) (NOK) Witnessing Declining Short Interest

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Nokia Corporation (ADR) (NOK) Witnessing Declining Short Interest
Hermann / Pixabay

Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) shares saw a substantial decline in the short interest in May. As of May 30th total short interest came in at 23,067,730 shares, a decline of 9.4% from the May 15th total of 25,473,378 shares.

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Rating upgrade pushed Nokia higher

Nokia stock shot earlier this week after Raymond James analyst upgraded the company from Underperform to Market Perform. Analyst Simon Leopold has initiated coverage on Nokia shares after the deal with Microsoft concluded.

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Also, in a research note on Thursday, June 12th, RBC Capital raised the price target on Nokia from $9.00 to $11.00 with a rating of Outperform. Canaccord Genuity analysts, in research note on Tuesday, May 27th, raised the price target on the stock from $10.25 to $11.00 and gave a Buy rating. Overall, Nokia has a consensus rating of Hold and an average price target of $12.46.

Repurchase to regain investors confidence

Recently, the Finnish giant announced that it will repurchase shares worth up to 1.25 billion euro (about $1.7 billion), in line with its 5 billion euro (around$6.8 billion) “capital structure optimization program.”  The repurchase will start from July 24, 2014 and will be valid till December 17, 2015, and within the period the company would repurchase 370 million shares. The firm stated in a statement that along with the 5 billion euro capital structure optimization program board of members at the company have given their consensus on repurchase of share under the authorization given by the Nokia Annual General Meeting held on June 17, 2014.

Shares will be directly repurchased from sellers in marketplaces and the buy back will be done according to the current market price of Nokia shares in marketplace.  This year, in May, the company stated plans to get on a capital structure optimization program under which it will strive to bring down the debts by second quarter of 2016, repurchase shares worth $1.7 billion over the next two years to “improve the efficiency of Nokia’s capital structure.”

Nokia said that it will start repurchasing the shares after the announcement of the second quarter 2014 results on July 24, 2014 and AGM has authorized the repurchase till December 17, 2015.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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