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Kr
''What do you think a cancelled share is?''
''it has created no value at the point of cancellation.''
''The 4 billion is essentially leaving the business ''
Stop the nonsense once and for all - 4 Billion is being INVESTED on behalf of shareholders, the result of which is shareholders will own a greater percentage of the business with the cancelled shares no longer having a right to assets and profits.
no more from me to you on the subject.
"Do you not get that as the shareholder you own a bigger part of the company for every cancelled share?"
A company that has used it's own cash, from a one off sale, to acquire these shares and so ends up poorer at the end of it? A bigger slice of a smaller pie.
Do you not get that as the shareholder you own a bigger part of the company for every cancelled share?
""ffs does it really need spelling out? dividends are monies leaving the business"
What do you think a cancelled share is? Over time, this may prove to be beneficial, or it might not but it has created no value at the point of cancellation.
At the point of cancellation, you are just converting cash into a share to be cancelled. The 4 billion is essentially leaving the business in the form of these cancelled shares.
KR
''A more fitting example is the last few Vodafone ex-divi days as you are dealing with cash which is the asset we are talking about. If the cash has no impact on the market cap, why does the share price open the next day at exactly less than what is being paid out?''
ffs does it really need spelling out? dividends are monies leaving the business, where shareholders pre xd are entitled to.
Spanish and Italian proceeds will be invested - there is no 'special' dividend
KR added with BE to the waffle list
"Kr
why is it that things need repeating over and over
There is NO direct connection between value of assets and the market capitalisation..
Is about a third of the current market cap due to the Spanish and Italian assets ? -
NO
Vodafones total assets are about 155 Billion Euro with net assets at about 63 Billion
Current market cap is less then 22 Billion Euro"
This probably owes a lot to the markets perception of the current management team and their ability to extract value from these assets (clearly the buyers of Vodafone Spain and Italy think they can make a decent return) and the general perception of telecom companies ability to monetise their assets going forward.
A more fitting example is the last few Vodafone ex-divi days as you are dealing with cash which is the asset we are talking about. If the cash has no impact on the market cap, why does the share price open the next day at exactly less than what is being paid out?
Kr
why is it that things need repeating over and over
There is NO direct connection between value of assets and the market capitalisation..
Is about a third of the current market cap due to the Spanish and Italian assets ? -
NO
Vodafones total assets are about 155 Billion Euro with net assets at about 63 Billion
Current market cap is less then 22 Billion Euro
"There is NO direct connection between value of assets and the market capitalisation. "
Yes, there is. There clearly is. For certain assets, how it is being managed etc. will also have a big impact on the market cap in either direction but value of assets still has an impact on the market cap.
Cash is the easiest of assets to value and reflect in the market cap. Once it's gone, it similarly easy to adjust the market cap to reflect that such as what happens when a divi is paid out.
PC also trying to put sense into people who have a lot to learn
"KevRow
of course if it comes to war in Taiwan or the Middle East or the US shutting down their Govt because they have run out of cash or any other such things.....then the markets dont care two hoots about numbers of shares , or matched cash levels ...or BuyBacks
all they care about is risk ...and with higher risks , share prices fall ...end of story"
Yes but no one, at any point, has disputed this. It's not related to anything that anyone is discussing.
KevRow
of course if it comes to war in Taiwan or the Middle East or the US shutting down their Govt because they have run out of cash or any other such things.....then the markets dont care two hoots about numbers of shares , or matched cash levels ...or BuyBacks
all they care about is risk ...and with higher risks , share prices fall ...end of story
"" So by your logic.."
it isnt my logic .... it is the market and the way it operates ... what "logic" you think there is ..is down to you to decide upon !!"
Either way, you seem to be suggesting that the share buybacks won't have a material impact on share price which is what has been under discussion.
A123 also trying to put sense into people who have a lot to learn
" So by your logic.."
it isnt my logic .... it is the market and the way it operates ... what "logic" you think there is ..is down to you to decide upon !!
"It illustrates that traders do care about things that impact the fundamentals.
well yes , but those "things" are more often that not linked to by algorithms and bots that move the millisecond a piece of data is out and picked up by the algos
Every RNS and media article from media publications is read by bots with words and figures turned into buys and sells .... and such like ....all of which ignore any Buy Backs !"
So by your logic, if it ignores the buybacks, you'd end up with less shares in issue and no change in share price?
''If anyone thinks that getting on for 20% of the current market capitalisation is due to the Spanish and Italian assets need to think again.''
20% is a reference to JUST the 4 Billion buyback spend.
It illustrates that traders do care about things that impact the fundamentals.
well yes , but those "things" are more often that not linked to by algorithms and bots that move the millisecond a piece of data is out and picked up by the algos
Every RNS and media article from media publications is read by bots with words and figures turned into buys and sells .... and such like ....all of which ignore any Buy Backs !
Kr
''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.''
How many more times does it need saying for it to sink in -
The market decides on the valuation of Vodafone on a daily basis, so your above comment was not needed.
''You, on the other hand, seem to be tying yourself up in knots''
I NEVER tie myself in knots - more a case that some cannot understand things
'' 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.''
trying??
This is what i mean by not understanding.
The more shares that can be bought for 4 Billion Euro the better it is for those investors planning to keep shares for the longer term.
Those wishing to exit Vodafone asap to invest elsewhere will not care about the longer term and would prefer a £1 + price asap.
''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.''
ffs
first of all yet again - the market decides on a daily basis the value of Vodafone.
There is NO direct connection between value of assets and the market capitalisation.
If anyone thinks that getting on for 20% of the current market capitalisation is due to the Spanish and Italian assets need to think again.
Vodafones total assets are about 155 Billion Euro with net assets at about 63 Billion
Current market cap is less then 22 Billion Euro
Dan thinks that the buyback will reduce the market cap by a further 4 Billion
'' "You have a lot to learn " ''
yes it appears so
''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.''
Haven't a clue what you are trying to say, but the asset sale will not impact profitability as those assets were not generating profits.
"he said "keeps going down ex-div "...he didnt ask why it went down on ex-div itself"
I wasn't really asking at all. It's obvious why it goes down above and beyond the day to day factors that dedicate share price fluctuations and it illustrates that traders do care about things that impact the fundamentals.
The CFO has made it clear that the company earnings must cover the dividend .... and ..they have said that they need to invest a lot with a Microsoft project and elsewhere ....so... it seems to me that they are not expecting to achieve great strides in the earnings and are using the Buy Backs as a tool ( once complete) to support the div per share from what they see as a fairly level dividend pool of cash
IMO
BEO1
he said "keeps going down ex-div "...he didnt ask why it went down on ex-div itself
Be
your posts are a lot of waffle . I could dissect them piece by piece, but you are not worth the time .
DAN
YOU NEED TO THINK A BIT MORE
''L.T.I. LONG TERM IDIOT . What planet are you on? Vod is not up 4% this morning.''
????
and?
it is called a stock market
'' This is a serious forum, please don't take the Mikey. PLEASE. Go away''
??
then why have you made a post saying that VOD is not up today giving the impression that I said that it would be ???
could do without a waste of time nonsense posts.
* Effect, not effecting
Which is exactly what most are saying. The buybacks wont have the effecting on the individual share price that LTI is suggesting. so if it doesn't affect the SP by the value he hopes but the shares in circulation drop by 20% by the time all the buybacks are done. If the SP hasn't moved, then what effect does that have on the Market Cap? Answers on a postcard