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Android,
I would rather the leadership spend ample time to evaluate deals instead of jumping into anything just because a hedgefund manager is eager to make a fast return to the detriment of the company.
As outsiders we lack complete context of the real motives behind these initiatives. Vod should sit tight on strategic assets; Vodacom, Germany, Italy, NL and UK. Vantage part ownership benefits the company medium to long term, otherwise they will have to lease without the rights to share the profits.
'VOD just tendered $2.3Bn cash offer for its $3Bn 4.375% NOTES DUE MAY 2028. That should push the average maturity of debt out beyond 11 years and the service cost after 2030 is less than 2%.'
Return on Investment ROI is increasing. Its the slow pace of deal execution causing the negative sentiment and the media dogma. RNS anytime for another spike I guess.
I like Olaf Swantee for new CEO
"Sorry to ask as I know this has been discussed ad nauseum, but there are too many posts to wade through.... I take it this includes Goodwill?"
Yes
Someone posted in here recently that the likes of Buffett wouldn't look at telcos because of their fundamentals. Wrong, he was heavy in verizon until this summer where he sold out all berkshire holding.
He is the GOAT of investing - period. That doesn't mean one should copy his moves as one lacks the context etc. Do you recall he revealed his openness to UK markets by investing in tesco, only to reverse and sell out at a loss a couple of years later? His investment strategy is mainly tailored to the american market and style.
Only late last year he gambled, yes, gambled on Activision betting msft would acquire it. Last night proved him wrong. Things not 100% concluded but unlikely the deal will happen. Looked from his prism, the odds of his bet (it wasn't an investment!) have crashed significantly. The stake of his bet isn't huge by the total net worth of Berkshire, but 10 billion stake is still not a small change.
Vodafone sp is right now like the riddle about the $100 note on the ground and two professors arguing between themselves if it's real why hasn't anybody picked it up yet.
Android 'Isnt it more accurate to use c€30Bn debt'
Good point. VOD just tendered $2.3Bn cash offer for its $3Bn 4.375% NOTES DUE MAY 2028. That should push the average maturity of debt out beyond 11 years and the service cost after 2030 is less than 2%.
Sorry to ask as I know this has been discussed ad nauseum, but there are too many posts to wade through.... I take it this includes Goodwill?
Hi Fleccy, i always have to give you 10 out of 10 for your positive thinking, but of course everyone's circumstances are different and it depends on how long term you want to wait to get your return of capital
This has been a difficult few years for making profit from shares or funds and i expect it's been the same for most investors unless you were lucky enough to invest in something like the oilers at the right time, below is an article i have just been reading with hl
In September 2022, about three quarters of the FTSE 100 constituents failed to provide a positive return, with almost half generating negative returns of over 5%. It’s unlikely that even the most diverse UK share portfolio would avoid a drop in value in this scenario. We call this ‘market risk’, the risk that the entire stock market falls.
The second type of risk is stock specific. The individual company you own could run into problems. Perhaps because its competitive position has weakened or it’s particularly exposed to high inflation and interest rates
I have 4 shares i could name all paying good dividends and although they drop just like anything else, you can be pretty sure your capital with be returned at some time each year, then you have the more difficult shares like Vodafone and Lloyds , several years later and they are still in loss, it does make you wonder just how many years you have to wait to get your capital returned on some shares, even my best performing funds have lost around 40% of the profit they built up in previous years
thankful i I'm not in any rush to sell, but a bull market would be more than welcome
"for anyone who's owns these shares at a higher price it's pretty obvious this is not good as they will have lost more of their capital"
Robleo, a paper loss isn't a capital loss until you sell, just like a paper gain isn't a capital gain until you sell. Over my many years of investing I've sat on paper losses several times and sold when the the stocks went back into the black and made a capital gain.
I'm currently sitting on paper losses on all three stocks I own, but I'm confident that I'll make a gain when the prices recover and I eventually sell, however long it takes.
Now some will say, oh but Vodafone's, BT's, or whoever's price will never recover, blah, blah, blah, but the truth is an undervalued stock will always eventually recover to a value dictated by its fundamentals, in the meantime I'll keep topping up as I receive dividends.
Motly fool, doing their best deramping effort with about 3 click bait articles a day.
' Ironically the low share price is lowering the cost of buying back debt.'
Also, not mentioned much on the BB, the market value of debt (or its net present value) must be dropping as interest rates rise and with inflation. Isnt that whats happening in the Bond market?
Isnt it more accurate to use c€30Bn debt net present value if you were to pay it all off early?
theluckyguy, for anyone who's owns these shares at a higher price it's pretty obvious this is not good as they will have lost more of their capital than they have received in dividends, this is always the danger with investing in individual shares
as the saying goes it's not how much you can afford to invest it's how much you can afford to lose, unfortunately it's not a very nice experience when it happens, and most of us will end up in this situation at some time or other
everyone has their own opinion, but i don't think anyone knows if this is the bottom or not, the possibility of a dividend cut could be a game changer, but there will always be winners and losers, anyone who gets in here at the bottom will most likely make a good profit when things get better, and good luck to them that's what we all try to do
unfortunately though you do get a minority of posters who just want to mock others losses, a bit sad really
best of luck all
Capt Morgan likes to make buyers who want to enter at a lower price and shorters who want to close out at mega profit both very happy
Have a research for yourselves both "negative catalyst" announcements this year
soon this company will have twice as much dept as its nav
Ex EE Boss Swanee, and O2 boss Dunne frontrunners for CEO post.
Ex UK boss Jeffrey being mentioned.
An internal promotion would be a disaster. Think any of the first two chosen, and SP should rise.
"Every day after market close they release RNS about buying own shares! But what's the use if its not helping share price?"
Every cloud has a silver lining; In this particular case Vodafone are buying back stock, at rock bottom prices, preventing dilution due to the MCB's. Ironically the low share price is lowering the cost of buying back debt.
Every day after market close they release RNS about buying own shares! But what's the use if its not helping share price?
Looks like Goldman Sachs selling shares rather than buying back!
Might be the Stroud branch.
Price to Book 0.4
"A drowning man will clutch at anything"
Nothing wrong with being underwater, as long as you've got enough air to last as long as you'll need it.
nothing wrong with being a trolley boy, much better than being a gutter boy ?
I think he works at Sainsburys gathering the trolleys together although not sure which branch. Yesterday he didn't type anything for some reason.
With Vodafone bouncing about 1p off the bottom he will be pleased tonight.
A drowning man will clutch at anything
"VOD's goodwill however, who really knows what it contains. As a shareholder you can ring VOD IR and ask them, but I doubt they will tell you. "
The reasoning behind Goodwill is all laid out in the Annual reports; You don't need to ring the company, just read the annual reports.
"Accounting policies
Identifiable intangible assets are recognised when the Group controls the asset, it is probable that future economic benefits attributed to the asset will flow to the Group and the cost of the asset can be reliably measured. Identifiable intangible assets are recognised at fair value when the Group completes a business combination. The determination of the fair values of the separately identified intangibles, is based, to a considerable extent, on management’s judgement.
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition.
Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill is not subject to amortisation but is tested for impairment annually or whenever there is evidence that it may be impaired. Goodwill is denominated in the currency of the acquired entity and revalued to the closing exchange rate at each reporting period date. Negative goodwill arising on an acquisition is recognised directly in the income statement.
On disposal of a subsidiary or a joint arrangement, the attributable amount of goodwill is included in the determination of the profit or loss recognised in the income statement on disposal. Finite lived intangible assets Intangible assets with finite lives are stated at acquisition or development cost, less accumulated amortisation. The amortisation period and method is reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
Licence and spectrum fees
Amortisation periods for licence and spectrum fees are determined primarily by reference to the unexpired licence period, the conditions for licence renewal and whether licences are dependent on specific technologies.
Amortisation is charged to the income statement on a straightline basis over the estimated useful livesfrom the commencement of related network services.
The canvas of the mona lisa is a thing and has a value, as with the frame. The goodwill is how much extra you will pay for the painting. The purchase price minus the canvas and the frame.
That goodwill you can see has a value. A good chance to resell the painting and get it back. VOD's goodwill however, who really knows what it contains. As a shareholder you can ring VOD IR and ask them, but I doubt they will tell you. You can only guess it has some resale value, or is it all vapour linked to past purchases gone bad. Have they written everything off from India yet? will the new CEO kitchen sink with a goodwill write-down?
It is safer to do your calculations excluding goodwill, and intangibles, that you have no idea if they even exist.
https://www.telcotitans.com/telefonicawatch/spain-to-extend-telefonica-shield-as-macro-headwinds-build/5905.article
"The Spanish government is reportedly set to extend the strategic shield intended to protect critical infrastructure companies from foreign takeovers for a further year, potentially keeping it in place until the end of 2023. The move would continue to make any hostile attempt to acquire Telefónica unlikely to succeed as the Group considers its strategy for the coming three years."
The market is making predatory moves against the Telecom sector, it's pretty clear Telecom stocks are undervalued and potentially easy targets.