TORONTO (CP) - You might think that by now pretty much everybody would have decided whether they wanted to buy, sell or hold shares of Nortel Networks Corp. (TSX:NT).
Nevertheless, more than six years after the stock peaked at $124.50 and four years after it bottomed out at 67 cents, Nortel remains the most heavily traded issue almost every trading day on the Toronto Stock Exchange.
Its daily TSX volume is typically between 10 million and 20 million shares with frequent spikes - on Sept. 26, for instance, 53.2 million shares changed hands, with the price closing down a penny.
So who's participating in all this activity? Is it day-traders in their undershorts trolling for gains of a penny a share here, a nickel a share there? Or brokerage computers volleying Nortel stock back and forth seeking similar incremental gains? Or is it ordinary investors, wistfully optimistic about a renaissance for Canada's premier high-technology company?
All of the above, market watchers suggest, though it's difficult to say in what proportions.
"You have a huge amount of marketability for the stock," observes Fred Ketchen, director of equity trading at Scotia Capital. (TSX:BNS).
Nortel has more than 4.3 billion shares outstanding, and "I think it is surrounded more by hope than anything else," Ketchen said.
"Every once in a while you hear that it might be a candidate for a takeover," he noted, and in the meantime "they've pared down, they've got their new management for the second time, or the third time, or the fourth time, whatever that may be."
Mike Zafirovski, appointed CEO a year ago, is well regarded, and many market punters see the current share price of under $2.50 as cheap, Ketchen added.
He suggests that the majority of Nortel buying and selling is done by individuals, not institutions, "and a lot of it day traders."
A gain of three cents per share on 50,000 shares is $1,500 for a few seconds of online work - "then they wait for it to go down and they do it again," Ketchen said.
"It's not my idea of fun, but it's a fact of life."
Dennis Freeman, executive vice-president at Caldwell Securities Ltd., notes that computer-driven volume on financial markets is spiralling startlingly upward, but like Ketchen he believes individuals rather than hedge funds or other institutions account for most of Nortel's activity.
"I don't think there's any particular story to Nortel," Freeman said. "It's just a very liquid stock, so they trade it."
For investors with a longer-term horizon, Nortel's prospects are dim, says Ross Healy, president and CEO of Strategic Analysis Corp., who was a lonely prophet of doom in the heady days of 2000 and remains a doubter about the company.
"It's not particularly surprising that trading would be in relation to the float, but does it mean anything? I'm not sure that it does," Healy said.
His firm calculates Nortel's fair market value at $1.33 per share, and "it just strikes me as a catastrophe in waiting."
"I look at the long, long, long-term trading pattern of Nortel for the past three decades, and if I had to make guess as to where the stock might bottom in a bearish market I would say that it could double-bottom at its 2002 low."
Scotia Capital, meanwhile, has a one-year price target of $2.80 for Nortel shares - but with a "caution warranted" risk advisory.
"We're not anticipating the thing is going to all of a sudden turn to rust and disappear," says Ketchen.
But value investor Healy is not alone in seeing a gloomy future.
"NT the ole darling of the TSE, has been reduced to a semblance of its great self and is no longer a daytraders dream," declares a recent online billboard posting by someone with the identification satchmo3.
"More like nursery tales resembling Humpty Dumpty, Big Bad Wolf, Three Lil Piggys, Alice in Wonderland, and Dr. Do Little."
