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"The problem is when inexperienced posters come onto the board and spread the half truths they have read or misunderstood from elsewhere. They are so convinced they know what they are talking about when clearly they do not."
The problem is when so called "experienced" posters think that they know better than everyone else but seem to struggle to give any illustrative examples of anything they say other than to repeat it over and over as if it's self evident.
"It also clear that the MC is not affected by the buy back."
Really? How will that work? 4 billion less cash and less shares in issue might not impact the share price but how on earth will it not impact the market cap unless the market values 4 billion in cash at zero? It will be cash at this point, so no need to keep going on about "non performing assets".
I dont see eye to eye with LTI on many things, but when it comes to buy backs, I share LTI's understanding of the mechanics.
Clearly if the SP is lower, a set amount of cash will buy more shares. The more shares are bought back, the lower the total amount of divi expense, or the reduced share number can pay out an increased divi at the same overall cost.
It also clear that the MC is not affected by the buy back.
Lastly, non performing parts of the company are a liability to Vodafone, not and asset, and as far as Voda are concerned they therefore carry no value, other than asset value.
The problem is when inexperienced posters come onto the board and spread the half truths they have read or misunderstood from elsewhere. They are so convinced they know what they are talking about when clearly they do not.
"THINK AGAIN - who on earth would be investing with that sort on devaluation.
I think you will find that the market will value Vodafone on it's profitability which will not be affected negatively with the sale of non performing assets.
The market cap is likely to remain at about the same level or increase from full year results time as the benefits of the vodafone investment materialises"
As has been mentioned multiple times, no one is saying that the share buybacks will reduce the share price but there is no reason for it to material change the share price either. No one, from what I can see, are saying that the buybacks will drive down the share price, so the buybacks are no reason for them to sell. You, on the other hand, seem to be tying yourself up in knots trying to rationalise why the share price going down is a good thing for the next 12 months or so and anyone who suggests they would want the price to go up in that period is somehow missing the bigger picture that only you can appreciate.
These "non performing assets" clearly have value. 4 billion for Vodafone Spain and 8 billion for Vodafone Italy. So when that cash generated from their sale is spent, it's not money they will ever get back and it will have an impact of the market cap. Using the cash for buybacks probably won't change it much at all due to the two largely cancelling each other out.
"You have a lot to learn "
There is that phrase again. You seem to be describing a situation where a company buys back it's own shares using cash it has generated, and would be expected to generate the same cash again, rather than cash from one off assets sales.
Wither way LTI is muddling up 2 different events and claiming the buybacks is the catalyst for the SP increase.
Take 2 identical company's (both have underperforming elements - to the same degree, everything is exactly the same at this point)
Company A keeps the assets and continues to have depressed earnings / cash flow as a result of this
Company B sells this assets, the earnings and cash flow improve as the drag is now gone.
Think we all agree Company B would see some improvement in there SP?
Now, lets say both company's decided to sell the assets.
Company A keep the cash and reduces the net debt position resulting in a NAV of say £10b
Company B uses the cash to buyback shares, lets say £4b, resulting in a NAV of say £6b
Which company would probably have the higher market cap? A surely? But which would have the higher share price? Neither immediately! I've tried to lay this out very binary and yes other factors contribute to the market cap which cloud the impact of buybacks.
However, as I have already mentioned there is an element of supply and demand of the shares left in issues, if you are removing 20% of the shares then the remaining shares are harder to come by, so an increase is SP would come about, but not as a direct result of the buyback.
Try reading the date Daniel instead of your usual name calling and calling people idiots - you are obviously on the bottle again or your drugs arnt working . The article is the 15th March !!
L.T.I. LONG TERM IDIOT . What planet are you on? Vod is not up 4% this morning. Come on please talk sense. This is a serious forum, please don't take the Mikey. PLEASE. Go away.
''Vodafone shares gain on Italian sale and share buyback''
https://www.sharesmagazine.co.uk/news/shares/vodafone-shares-gain-on-italian-sale-and-share-buyback
''Along with its Spanish business, the return it generates is less than the cost of funding its operations. It therefore makes sense to exit these underperforming markets''
https://uk.finance.yahoo.com/news/vodafone-share-price-despite-50-154700797.html
Dan
why is it that the vodafone market cap has increased since the announcement of the 4 Billion buyback - in your mind it would make no sense as you say that the valuation would go down.
''That disposal, along with other deals, has left Vodafone with a load of cash, €4 billion of which it will return to investors via buybacks. Predictably, investors cheered, the stock is up about 4% this morning.''
https://www.bloomberg.com/news/newsletters/2024-03-15/vodafone-plans-4-billion-share-buyback-after-asset-sales
Dan
''This is basic stuff, so please can we move from this nonsense. L.T.I. please give us a break, because you have not a clue what you are talking about.''
I think it is you who is coming out with nonsense. You have a lot to learn
''because there are less shares in circulation after cancelling the shares, each share will be worth about the same''
if they remain the same after spending 4 Billion euro, that would equate to a 4 Billion devaluation of Vodafone meaning the market cap falling from the current £19 Billion to
about £15.58 Billion.
THINK AGAIN - who on earth would be investing with that sort on devaluation.
I think you will find that the market will value Vodafone on it's profitability which will not be affected negatively with the sale of non performing assets.
The market cap is likely to remain at about the same level or increase from full year results time as the benefits of the vodafone investment materialises.
Share buy backs. If vod spend 4 billion euro's buying back shares, then of course 4 billion euro's comes off it's balance sheet (not rocket science is it?) But because there are less shares in circulation after cancelling the shares, each share will be worth about the same. This is basic stuff, so please can we move from this nonsense. L.T.I. please give us a break, because you have not a clue what you are talking about.
Rob. Up is good, down is bad. You can't argue with that. Well some on here can, but what can you say? It is alright for you though with big profits from international funds, . Have a good good weekend mate. Don't let your wife nag you into buying premium bonds?! Are you a man, or a mouse??!! Nice to see fleccy back, but I still can't understand what he is going on about. One day perhaps I will? Cheers fleccy. The only way is up. New tax year Monday. So time to buy into an I.S.A. if this year is full up. I am hoping for a big rise after Monday.
Well let's hope the results will give this a good push up, i mean down then up again before next year i think lol
very confusing this, i think i will go and buy some premium bonds, then i know i just want them to win
anyway good luck all and let's hope it's a good day tomorrow, urgh what is a good day
cheers LTI
Fleccy can i have a second opinion please
only joking guys
May 14th is the next date of significance - hopefully will get a more accurate timing for the start of the buyback
It will be interesting to see if you guys are shouting for this to go up or down tomorrow
Downe 530, I is afrade tommorow culd be a verey bade daye agane sadley.
Nuthin will make vodefone go upp.
Kr
are you a shareholder? if so are you selling ?
Downe ovver 500 points rite know
"Kr
''Anyone who thinks that a business can cannibalise itself to buy back it's shares and somehow be worth the same at the end of it with less shares in issue needs to start engaging their brain.''
you have a lot to learn"
Everyone does. Those who think they don't tend to just be arrogant and belligerent.
"Kr
as i said -
Anyone who thinks that the Vodafone valuation is going to drop by 4 Billion euro (a large percentage of current market cap) maybe should stay clear for a couple of years."
Why? If the valuation drop is matched by a reduction in shares, it's largely zero sum. Anyone who believes that the main catalyst for an improved share price is buy backs funded by one off asset sales are probably the ones who are better off steering clear.
Kr
i expect if you are a shareholder you will be contemplating selling, with the 4 Billion 'devaluation' coming up
Kr
as i said -
Anyone who thinks that the Vodafone valuation is going to drop by 4 Billion euro (a large percentage of current market cap) maybe should stay clear for a couple of years.
Kr
''Anyone who thinks that a business can cannibalise itself to buy back it's shares and somehow be worth the same at the end of it with less shares in issue needs to start engaging their brain.''
you have a lot to learn
"Anyone who thinks that the Vodafone valuation is going to drop by 4 Billion euro (a large percentage of current market cap) maybe should stay clear for a couple of years."
Anyone who thinks that a business can cannibalise itself to buy back it's shares and somehow be worth the same at the end of it with less shares in issue needs to start engaging their brain.
"''then clearly it will be valued at less.''
why is that? - what value was the market placing on non performing assets that may have continued to deteriorate further , before a clear cash amount was offered.? "
The value is 4 billion for Vodafone Spain and 8 billion for Vodafone Italy which has now, or will be, realised through their sale. If 4 billion of the money generated as a result of that one-off sale of assets is spent on the buying back shares, you will have less shares and a company worth, give or take, 4 billion less. Combine the two together and I'm not sure it will have the much impact on the share price one way or the other.
I has bean talkin abowt this for somme tyme.
The sell of have beggun in USA, dowe down 430.
I takes a lott off stick hear for tellin the truff.
Somme off use don't like the truff.
You wants me to blowe hot air up you're a s s es, well that's ain't hapening...