According to the latest reports the Euro Stoxx 50 Index that comprises of 50 top stocks from all over Europe is going to drop Finnish mobile maker, Nokia, from its list on March 18th. The latest development is a big blow for the Lumia handsets producer, as Nokia has been really trying hard to snatch its market share back from the Android-based devices and Apple’s iPhone by introducing a new line-up of mobiles. In fact the company was able to gain some momentum but now as a result of the latest move share price of Nokia’s stock is expected to go down because investors will look to cash in their shares so they could invest in the stocks of the companies left on the 50 index. Nokia was ranked 34th on the index and EADS, an aerospace firm from France, will replace it in the index. The announcement was first highlighted by Yle.fi.
Though the move was a part of regular review of the index, it will hurt Nokia badly because the company has posted better earnings in the last quarter than before. The multinational company has depicted an operating profit of $584 million over net sales of $10.7 billion. Moreover, during the fourth quarter Nokia sold 4.4 million units of its Lumia handsets and 9.3 million units of its Asha models. In comparison to the last quarter Nokia posted an operating loss of $754 million over net sales of $9.49 billion. Now investors and mutual funds that have made investments in Nokia’s stock will be looking to cash out.
If that does not affect the stock price of Nokia then, symbolically it can still hurt it because the Finnish manufacturer was once the largest mobile phone producers in the world and now it is not even a part of Europe’s index that comprises of top 50 businesses in the region. However, this is not the end of the world for Nokia because the company was dropped from the Euro Stoxx once before in September 2011, but it managed to jump back in to the list.
Therefore, it is expected that Nokia can repeat history once again, especially the way company is rolling out its new Windows-based smartphones such as the mid-level Lumia 720 and low-end Lumia 520 that have just made their debut at 2013 Mobile World Congress in Barcelona. In addition to this, rumours are whirling that Nokia is looking to hop into the tablet market as well. Moreover, in association with Microsoft the company has plans to produce more apps and products for Windows Phone 8 platform.
Source: TNW
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