Ericsson's Troubled Deal
Ericsson's (ERICY ) new chairman, Michael Treschow, has his hands full. The Swedish telecom-equipment maker's $3.2 billion share offering appears to be in trouble.
Shareholders, who are being asked to buy new stock through a rights offering, are hesitating. With the share price down more than 90% since the March, 2000, peak, investors worry they may be throwing good money after bad. Officials from institutional shareholders such as Alecta, a Swedish pension fund that holds about 3% of the stock, have been publicly speculating that the offering could be canceled if the share price falls below $1.50. Ericsson shares have tested that floor but bounced back to $1.65 on July 2, thanks to takeover rumors.
Edited by Rose Brady