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Fleccy. Hello, I wonder you could help me here. Vod's market cap is it's share price times the shares in issue. My question is, if vod buys back shares in a buy back scheme, will this mean as there are less shares in issue after the buy back, the market cap will fall unless the share price rises. If the market cap doesn't fall then it would seem to me that a share buy back is a one way upward bet as each share holder will own a larger slice of the company. It seems to me that after a share buy back the market cap should fall, but because each share will own a larger share of the company then it will balance out. I am all for buy backs if the managment think that is good thing, but it is good to fully understand how it all works. Thank's a lot Fleccy if you can help me on this one. Cheers & have good one.
Desperate Dan, Fleecy make it up as he go along.
.
I nows morre than I letts on you no.
He be like a potatoes wafle wiv out tha potato
Dan
''Thank's a lot Fleccy if you can help me on this one. ''
Flec is not too keen on buybacks.
You have already been given relevant info regarding buybacks - it is up to you to digest properly which would help with investment decisions.
The current market cap is under 22 Billion Euros. Your stated believe is that a 4 Billion investment in Vodafone shares would reduce that figure by 4 Billion, which with your thinking would make Vodafone not a very good investment to be purchasing .
But he's not saying its not am investment, he's saying the market cap drops, shares in issue drop = SP stay the same, so his investment is flat. I personally believe there will be some SP growth but not in a linear way. Reduced float will reduce supply and demand should improve as the future earnings improve due to loss making markets being exited, but not purely as a result of buybacks. Ironically I was in barc, they spent last couple of years doing sizeable buybacks, it wasn't till a while after they finished that the SP went north, loads of factors involved I get it. But at no point did you see x shares purchased and cancelled and a correlation to the SP compensating
It seems one or two cannot comprehend, and need the same thing repeated to them over and over and over and over and over again until maybe then it sinks in (must be age related.)
The market decides on the valuation of Vodafone on a daily basis.
NOTHING TO DO WITH BUYBACKS, which the purpose of them is solely to reduce share capital
So day 1 vodafone buys back 1% of shares. The SP doesn't move due to buybacks? Only what the Market decides? Haven't you just agreed we are correct then? If the buybacks don't cause the SP to move then x less shares = lower market cap.
Also do you not understand how contradictory you sound? On the one hand your saying the buybacks will effect the SP then on another your calling people stupid and saying on the market determines the SP, which is it?
BE
do a bit of shopping over the weekend to find yourself a brain that functions
it seems one or two STILL cannot comprehend, and need the same thing repeated to them over and over and over and over and over again until maybe then it sinks in (must be age related.)
The market decides on the valuation (market cap) of Vodafone on a daily basis.
NOTHING TO DO WITH BUYBACKS, which the purpose is to solely to reduce share capital.
Buybacks for cancellation would increase the SP over what it would otherwise be.
"It seems one or two cannot comprehend, and need the same thing repeated to them over and over and over and over and over again until maybe then it sinks in (must be age related.)
The market decides on the valuation of Vodafone on a daily basis.
NOTHING TO DO WITH BUYBACKS, which the purpose of them is solely to reduce share capital"
It's because you keep trying to play the same trick of reducing the number of shares without accounting for the cost of reducing the number of shares.
Instead, you hide behind this nonsense of "The market decides on the valuation of Vodafone on a daily basis.". The market will reduce the valuation to reflect the reduction in cash and it will be offset by the reduction in shares, so no real change. Shock horror, this doesn't turn out to be a fool proof way to drive up the share price by reducing the numbers of share in issue at zero cost.
Daniel you're correct, if the price stays around 70p after the share buybacks then the market cap will fall dependent on the number of shares cancelled. I'm not completely against buybacks, in Vodafone's case I actually agree with the strategy as long as they also embark on a significant debt reduction strategy. The only reason I mention debt is because it's a recurring theme used to beat up both Vodafone and BT, if they operate a policy to pay down debt as it matures over the next 8 years they could knock €30 Billion off the Gross Debt figure.
https://docs.google.com/spreadsheets/d/e/2PACX-1vRA1ndHTf_Bz7O_moDxmcbWnEtcusZucUu6lEJvm3O4mGooeH4ErFjRqot3RQHBaVXCgoUED1k2CUVK/pubchart?oid=1681133451&format=interactive
Flec
''Daniel you're correct''
Dan
4 Apr 2024 16:04
'' If vod buys back 4 billion euro's of shares & cancel them, the market cap will reduce by 4 billion euro's. The 4 billion euro's comes out of the market cap''
Fleccy. You are a breath of fresh air. At last someone is talking sense. I am not for or against buybacks, but I think the vod bod know what they are doing, & clearly more than the new kid on the block A.K.A. L.T.I. does. It is just common sense that you can not buy back 4billion euro of shares without having to pay it. Of course if the vod sp goes up after the share buy backs then the market cap may even rise, & I hope it does. Thanks mate.
''Thanks mate.''
why?
Dan
4 Apr 2024 16:04
'' If vod buys back 4 billion euro's of shares & cancel them, the market cap will reduce by 4 billion euro's. The 4 billion euro's comes out of the market cap''
Vodafone market cap is less than 22 Billion Euro.
Dan expects that to reduce by 4 Billion with the Vodafone investment.
With that outlook Dan , I suggest you take your money and invest elsewhere.
L.T.I. Are you feeling alright? You sound like a confused parrot
Dan
confused ? there is NO confusion -
Vodafone market cap is less than 22 Billion Euro.
Dan expects that to reduce by 4 Billion with the Vodafone investment.
With that outlook Dan , I suggest you take your money and invest elsewhere.
Dan
4 Apr 2024 16:04
'' If vod buys back 4 billion euro's of shares & cancel them, the market cap will reduce by 4 billion euro's. The 4 billion euro's comes out of the market cap''
No way I am taking my money & investing elswhere, in fact, I plan to top up with vod on Monday in my I.S.A.
Dan
You are very confused - you want to top up at the same time as saying that the market cap will reduce to under 18 Billion Euro . Have you come to the conclusion yet that you have been talking nonsense.
Vodafone has net assets at about 63 Billion Euro
Italian and Spanish sales will bring in 12 Billion Euro
Vodafone market cap is less than 22 Billion.
The rest of Vodafone (excluding Spain and Italy) would not have a market cap of
less the 10 Billion Euro - End of
Dan
4 Apr 2024 16:04
'' If vod buys back 4 billion euro's of shares & cancel them, the market cap will reduce by 4 billion euro's. The 4 billion euro's comes out of the market cap''
Dan
Vodafone will receive 12 Billion from sales.
Using your nonsense logic -
''' If vod buys back 12 billion euro's of shares & cancel them, the market cap will reduce by 12 billion euro's. The 12 billion euro's comes out of the market cap''
That would give the rest of Vodafone a market cap of less than 10 Billion
“You are very confused - you want to top up at the same time as saying that the market cap will reduce to under 18 Billion Euro . Have you come to the conclusion yet that you have been talking nonsense.“
But the reduction in shares means the price stays the same, which doesn’t suit your narrative, so you’ll ignore that part again and round and round we go.
KevRow. Sorry mate, but who are you talking to?
Kr
''But the reduction in shares means the price stays the same''
The market values Vodafone (market cap) on a daily basis, which means the share price will change.