Shares of struggling mobile phone maker Nokia (NYSE: NOK) on Tuesday plunged to their lowest point since 1998 after the company warned sales and profit estimates for the current quarter would fall well below previous estimates.
Nokia plummeted more than 17 percent Tuesday morning after it announced that second-quarter results would be "substantially below" earlier guidance.
(Also see: Can Nokia investors afford to be patient?)
Nokia stock was trading in the late morning at 6.79, more than 17 percent Friday's closing price of 8.20. The last time Nokia shares traded this low was in March 1998.
Since Feb. 11 -- when Nokia announced its mobile-phone partnership with Microsoft -- Nokia's stock is down 38 percent at Tuesday's current low.
Other than a slight bounce from bargain hunters, things aren't going to get any better any time soon -- if ever -- for Nokia shareholders.
Not only did Nokia say Tuesday that sales and margins for its second quarter will be way below previous estimates, it also said it would no longer provide guidance for the fiscal year.
Imagine your business being in such disarray that you can't offer guidance to Wall Street. And that's because Nokia genuinely doesn't know how much worse things will get before the first Windows Phone 7 devices begin shipping.
Unfortunately for Nokia shareholders, things will continue to get much worse through the rest of the year and beyond. Microsoft and Nokia have frozen their own markets. Who's going to buy a smartphone from either company between now and when the first Nokia WP7 is released? Hard-core price shoppers, maybe. (And there's goes your margin.)
And let's face it: Despite Nokia's "increased confidence that the first Nokia product with Windows Phone will ship in the fourth quarter 2011," until it actually happens, that's just talk. Based on the recent history of Microsoft and Nokia in the mobile market, would you want to place a bet on their joint smartphone shipping on time? Or bug-free?
In the meantime, Apple and Google will continue to update their already popular smartphones running iOS and Android, respectively. Unless they decide to be nice and wait for Nokia and Microsoft to catch up.
Nokia chief executive Stephen Elop, a former Microsoft executive, on Tuesday said, "Strategy transitions are difficult."
So are meltdowns.