2011/02/19

Nokia head swaps Microsoft shares for own firm: report

HELSINKI, February 18, 2011 (AFP) - Nokia chief executive and former Microsoft executive Stephen Elop, who has sealed a tie up deal with the US giant, this week swapped all of his Microsoft shares for Nokia stock, reports said Friday.

"On Thursday, Elop bought 150,000 Nokia shares for one million euros ($1.35 million)," financial daily Kauppalehti reported, adding that this was the first time Elop had bought Nokia stock.

Elop's dearth of Nokia shares has raised some eyebrows, but he told reporters ahead of the Mobile World Congress in Barcelona last week that insider trading rules had long prohibited him from selling Microsoft or buying Nokia stock earlier, as negotiations were underway with Microsoft on a strategic partnership.

"As soon as I'm clear of the legal restrictions, of course I'll get rid of the rest of my Microsoft shares," he told reporters on Sunday.

Elop, a Canadian, left Microsoft for Nokia last September, becoming the first non-Finn to captain the world's largest mobile phone maker.

"He might want to send a clear message that he's now part of another company," Pohjola Bank analyst Hannu Rauhala told AFP Friday, adding that owning so many shares ties Nokia's leadership to the company's overall performance.

"If it goes well, they win, and if it goes poorly then they lose," Rauhala pointed out.

Last Friday, Elop said that Nokia, which has been hard-hit by harsh competition from Apple and Google, would dramatically shift its strategy and abandon its own smartphone platforms to adopt Microsoft Phone.

The strategic shift was prefaced by an internal memo that leaked to media, in which Elop said Nokia was "standing on a burning platform" surrounded by a "blazing fire" of competition.

Nokia's share price plummeted more than 20 percent after the announcement, falling earlier this week to its lowest level since 1998, allowing Elop to buy his shares at a deep discount.

"I was legally prohibited from buying in Nokia until all of this news was out," he insisted on February 13.

The move to ditch Symbian for Microsoft is seen as immensely unpopular in Finland, amid fears of massive layoffs and a brain-drain of developer talent from Helsinki to Silicon Valley as a result.

Finnish media lambasted the move, with some reports accusing Elop of masterminding a Microsoft takeover of Nokia - speculation that was fuelled by the fact that Elop until Thursday had significant holdings in Microsoft and few-to-none in Nokia.

News agency STT called it a "total surrender" while financial paper Kauppalehti quoted a Finnish analyst predicting Microsoft would buy Nokia outright, with Elop acting as a Trojan horse.

The purchase makes Elop the third largest shareholder among Nokia's leadership, behind board chairman Jorma Ollila and executive vice president Mary McDowell.