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" 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
SPT did a BuyBack ... everyone thought great buying buy whilst shares cheaper than the year before...but.... towards the end of that ..they announced that there was a strong slow down of orders from China ...share price plunged .... nobody cared two hoots about cash spent on shares , or did any knid of maths related to that
..order slowdown .... sell,sell,sell
Thats just not correct. Little chance the volume players are buying for the dividend to then sell, to drive the ex div drops (which mostly mirror the dividend yield %). The market opens with a drop similar to the dividend % just recorded, before any real volume has started. It drops because the company has just committed to paying out a sizeable value of cash with no value to the business. Yes the movements post the open is then is some way due to what you mentioned. hence why sometimes the % drop is better or worse than the equivalent dividend % that was recorded
So your belief is that the 4 billion in cash doesn't matter as traders are more concerned with "other things"? That's the belief as to why it will have no impact on the market cap when it's gone?
" Then why does the share price keep going down ex-divi?"
various reasons ....often the SP gets over bought for a dividend ..especially a final dividend ... traders then sell and know to sell down the share, out of the over bought price cycle , and go elsewhere ..come back later ...buy back lower ... depends on the market sentiment overall and the sector
LGEN - Final Div coming soon, see what happens after ...often drops back , down to a low again ... take the DIV , sell..buy back lower ...new price cycle again lol
"" if the 4 billion in cash being converted into shares and then cancelled will impact the market cap and I'd say it clearly does "
I would say as previously that it does not ...because ..the traders wont really give too much of a damn about it .. "
Won't they? Then why does the share price keep going down ex-divi?
" if the 4 billion in cash being converted into shares and then cancelled will impact the market cap and I'd say it clearly does "
I would say as previously that it does not ...because ..the traders wont really give too much of a damn about it ..
why? ...because they are focused on other things
You can happily do Buy Backs ..but.. The Investment Bankers will sell,sell,sell if other factors affect their view on your revenue or earnings prospects ... they wont care two hoots about your daily share buys
Guys, this buyback argument has been going on for years over on the Lloyds board and still is, do yourselves a favour and drop it
just wish the share price up, if it's up it gives people choices sell up and get their money back , or if they believe the future of this company will be rewarding for them hold
this has been down for too many years
"There is some notion of belief that a Market Cap is some carefully worked out figure taken from a load of fundamental figures or formulas
...when in fact
..it becomes nothing more than a result of the sentiment around the day to day Trading around FOMO or FOBI "
No one is suggesting that the book value and market cap are always, or ever, equal or that the share price is always based on pure logic unaffected by sentiment.
The discussion is around if the 4 billion in cash being converted into shares and then cancelled will impact the market cap and I'd say it clearly does, as the source of the cash is from a nonrecurring source, so won't be replaced.
For those that think it won't. Why? 4 billion in cash isn't a difficult to value asset that is worth a lot when managed well or a liability when it's being mismanaged. It's just cash that will be gone.
Mmm
thanks for that input. Not sure anyone was disputing that
Listen carefully: The selling price of a share increases by 5% during a day; it follows that the "market capital" of the company also increases by 5% in that day irrespective of any other events in that day.
Are you saying that a companies book value of assets have absolutely zero value in the SP? You don't think II will use it for there risk / reward on buying into a stock? and therefor if there is a safety net of a high NAV in comparison to the MV then that results in less risk. Less risk means more potential investors in a company, more investors means more demand means potentially a higher share price.
Its not the be all and end all, totally agree, but it 100% plays a part in an investors appetite in the stock.
There is some notion of belief that a Market Cap is some carefully worked out figure taken from a load of fundamental figures or formulas
...when in fact
..it becomes nothing more than a result of the sentiment around the day to day Trading around FOMO or FOBI
... some Traders battling it out between each other trying to decide if War is coming to the Middle East, Egypt economy is going to collapse or not, Putin is going to throw a wobbly across Europe, The FED has or does not have any idea what it is doing, whether Biden is going to borrow and put more and more Dollars on the Poker table of war funding .. or anyone one of a dozen other such Bear sentiments
I think you are all wasting your time delving into some mathematical idea of what the MCAP might relate to , or not
..the truth is...nobody cares a damn about the MCAP .... just a matter of whether market players can buy cheaper tomorrow than today and whether Put Options are stronger or weaker than Call Options etc
"And there we have it KevRow, because you have just demonstrated that you are confusing market capitalization with book value. Two different things.
But you are not alone, most on here dont seem to get this."
No, I'm confused as to how you can think a business that has 4 billion in cash can then not have 4 billion in cash and be valued the same. Name dropping different methods of valuing a company doesn't explain this.