Nortel Stocks Plunge on Bankruptcy News

Nortel Networks (NT) stocks hurtled downward Wednesday on reports that the company is looking at filing bankruptcy.

The telecom equipment maker’s shares dropped 23 percent after the Wall Street Journal said Nortel is getting advice on bankruptcy-court protection from creditors in case restructuring plans don’t work. Nortel’s stock closed at 40 cents Wednesday.

Nortel has been exploring ways to make itself profitable over the past couple of years. The Canada-based company has struggled to keep up with IP technology innovations, eventually lagging behind firms with leaner operations and cheaper equipment. Nortel really surprised analysts this fall when it said it wanted someone to buy its Metro Ethernet Networks unit, the division that everyone thought held the most promise for the struggling company.