A (slight) note of caution, this analysts has been bullish on NOK for awhile. Not that the report is not good, just pointing it out.

They may have been bullish for some time, however, my own due diligence since the merger was announced led me to almost the same conclusions as they have come up with.  The one additional nugget of info/analysis they bring up is that the cost reduction synergies could be as much as twice what Nokia has stated.  This research note is also based on new information (the merger), so I would expect them to update their thoghts on Nokia's prospects again to reflect this merger potential.

I feel quite confident that this investment will pay off handsomely.

To be clear, I was not being bearish on ALU/NOK. I had just read some Merill thoughts within the previous 24 hours so their bullish stance was fresh in my head. Was just noting it.

I agree so much I added some to my position today. We shall see!  :)

Jon,

I did not take it as you being bearish, and your comments are always welcome and appreciated.  I plan to add more shares to an already large position, I view this as an opportunity and a gift for those prepared to be patient with a volatile position.  If the market gets a little dicey, I think I might be able to pick more shares, not sure which level it could drop to but looking at the one year chart, tells me there is good suppport around the $3.5 area.  I would be tempted to start adding again in the low $3.60s

More thoughts on the Bank Of America's research note on the Nokia-Alcatel deal, I believe the research team has done extensive work on where the cost reduction synergies lie, the note is very comprehensive and carries a good deal of credibility.

I believe their estimate is fairly accurate, they make a good case of why just in Wireless alone there could be about $900M of cost reductions.  Additionally they touch on cost savings on 35 R&D (24 are ALU's and 11 are Nokia) sites spread around the globe, clearly Rajeev Suri, Nokia's CEO is exerting stricter cost controls than ALU had in the past.  R&D sites are especially expensive, given that compensation (salaries, benefits and pensions where applicable) for engineers and managers in this field are particularly high.  I agree that in R&D alone there could be a huge area for cost controls.

They also touch on consolidating manufacturing sites, especially in China, where both NOK and ALU have a total of 5 sites, and an additional 6 around the globe.  They too mention that Sales force in Wireless is also another area where lots of cost controls can be had, then there is the personnel involved in Switches and Routers (from Juniper) and backhaul (Dragonware), which won't be needed because ALU brings that with the deal.

They too touch on refinancing debt at the much more palatable interest rate.

There is plenty of cost savings opportunity for the combined entity.  It will take several years to achieve all the cost reductions, specially the R&D site consolidation, hence my 3 to 4 year horizon.

I find it extremely hard to think this is not a golden investment opportunity, I trust that Rajeev Suri possesses the right skill set to deliver on these promises.  He got high praise for his handling of the Motorola and Nokia-Siemens integration into Nokia from a lot of the Telecom Equipment sector analysts.

NOK and ALU both down significantly today, as folks already know. Searching both co's, I find no news to attach to that. Would like to accumulate more shares, mulling whether here might be the place.

The trading action on NOK and ALU reminds me of INFN as it started to descend to the 4s (this was around mid 2012, if memory serves me right), this, even though it was at the inflection point in sales of their then new 100G system. Frankly, there was no reason why it dropped so low.  Now INFN's stock is north of $21  It reminds me that the market can and is often wrong about the long term prospects/potential of a company.  And we know the market can distort valuations on both the high and low side, it happens all the time.

I am going to hold on to my shares, the trading action may be poor over the short term, but the eventual gain is IMO a 100% return.  I have felt this way for some time, so a long term investment it is for me, i.e. 3 to 4 years or until my investment thesis no longer holds true.