Options traders are betting Nokia Oyj will gain 14 percent by Feb. 19 as the world’s biggest maker of handsets returns to profit and investors bet the company is about to introduce technology.
Speculation that Nokia will rise pushed the number of bullish options on the stock to almost double the level of bearish ones, the highest ratio in about a year, according to data compiled by Bloomberg.
The contracts may pay off should Nokia’s earnings surprise investors this month after the company reported its first quarterly loss in October. Chief Executive Officer Olli-Pekka Kallasvuo is scheduled to give the Jan. 8 keynote speech at the Consumer Electronics Show in Las Vegas. The wagers come after Fitch Ratings cut Nokia’s credit ranking on Dec. 21 and the shares trailed the Standard & Poor’s 500 Index by 41 percentage points in 2009, the most ever, data compiled by Bloomberg show.
“Investors are betting that Nokia can’t continue to get things wrong,” said Michael Yoshikami, chief investment strategist at YCMNet Advisors in Walnut Creek, California. The firm manages about $1 billion and owns Nokia shares. “The iPhone has been a wake-up call for them and they are starting to show that they understand the market has changed.”
Nokia, based in Espoo, Finland, has faced slumping consumer demand and mounting competition from Cupertino, California-based Apple Inc.’s iPhone. Google Inc., the Mountain View, California- based owner of the most popular Web-search engine, introduced its own smartphone this week, the Nexus One.
ADRs Slip
American depositary receipts of Nokia slipped 0.8 percent to $13.15 in New York trading yesterday, extending a 19 percent retreat over the past year. Its share of the smartphone market, the industry’s fastest-growing sector, fell to 39.3 percent in the third quarter from 42.3 percent a year earlier, while Apple and Research In Motion Ltd., the Waterloo,…