Cash is Piling Up at Nortel: $781M vs $599M in January

Nortel is in the news today:

"Nortel Networks Corp.'s U.S. operations say cash is piling up in bankruptcy, and they're ready to set $30 million aside to anchor performance bonds to keep customers comfortable.The troubled telecommunications-equipment maker had $781 million in cash or the equivalent this week, up from $599 million in January when it filed for Chapter 11 protection, according to a filing with the U.S. Bankruptcy Court in Wilmington, Del." (by Peg Brickley, Dow Jones Daily Bankruptcy Review).

With the company under bankruptcy protection, it does not need to pay its debts, thus cash would go up as long as sales keep coming and are higher than expenses. Therefore, the good news is that this seems to be indeed happening. The company is paying its salaries on time, and is earning revenues. Stock went up 25% today, which does not mean that much as it had gone down 25-30% in the past 2 weeks. Still, there is value here. How it will be materialized is the question.