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The phrase "inflation linked contractual arrangements" in the sales pitch for the tower company is probably what Vodafone shareholders should be wary of. ie Loss of control except through legal contracts with a third party to whom you pay a mark up . Presently Vodafone just incurs the cost. Upwards only inflation rather than market linked rent agreements is what did for a lot of retailers in this country.
If they use the money to just pay down debt and secure good prices for the services to be provided then it might be a good idea but i don't trust Vodafone to not use the funds to embark on more deal making on some "exceptional opportunity" that suddenly presents itself.
I find Vodafone a frustrating investment. It is well run operationally and Telecoms is a thriving sector.
the market isn't impressed. I think they thought it should have done better in a locked down world. I've held Vodafone for years so i'm immune to the endless disappointments. It's not a badly run company operationally but there is often some rather dubious deal making at the board level. I'm not convinced selling off the towers is a good long term idea in reality although i'm sure it looks great in theory on powerpoint. The Indian fiasco speaks volumes about poor judgement at senior levels.
I think they've had enough leadership change. Murdoch is a capable CEO who knows the company inside out. He was pushed to one side after the HP deal in favour of an HP guy who failed and left. Loosemore bailed out last year when he realised integrations are more complicated than "click and repeat".
I think what spooked the market in the results announcement was what they didn't say rather than what they did. The market wanted to hear reassuring noises about current trading. Personally i'm sticking it out although i am finding the constant excuses about not finishing the integration work irritating now. I suspect it may have turned into a gravy train for some expensive consultants.
I think an offer for the whole company is now an absolutely nailed on certainty. It's undervalued because the market has lost confidence and given up on it, so the obvious opportunity to release value is take it off the market. The lowering of intangibles values of 922m that seems to have spooked everyone is described in most of the media as a write off when it isn't it is a reduction due to changing the discount rate. Says it all really.
Also HPE integration costs are continuing to fall steadily.
It's rather hard to understand what in these figures would have caused he share price to move at all. It was all known except the write off that's an accounting technicality because the discount rate has changed due to monetary policy.
Judging by US jobs numbers it's looking like a V shaped recovery in US at least which is MF's biggest market by far.
Helpful news. The refinancing is a major milestone for the company's progress. Only thing left to prove is that the recurring revenue model is as robust as the company says it is. The buyers of the debt obviously think it is. £5 a share at least would be a sane price for now but it's going to be a while before the market trusts this company again thanks to Loosemore's selfish antics.
Was always odd that in the locked down world that a telephone and data service provider would have its share price forced down significantly.
It's going to be two years before things go back to normal if they ever do.
If home working goes mainstream as a result of all this then the vod will fly.
The undervalued/possible bid narrative has been well explained. If you think its wrong then sell them and take your lose.
I'm not sure I'd want a deal at these price levels. I'd rather take my chances on the price recovering further.
12 months I'd say at a guess. They've been working on the integration for 2.5 years. They've never said it failed or had stopped, just it was taking more time and money.
Dyor
Most the commentary I've read has been quite favourable at these prices. They sell software licenses to large businesses that renew annually so it will survive.
There is a huge potential upside if they ever finish their integration work. Confidence would return.
They don't need to take it, they can just create as much of it as they need. The Joy's of being a sovereign country with it's own currency. I'd be worried if I lived in the eurozone and they start talking about bailing in deposit holders to any rescue.
Some idiotic shareholder organization is calling for the CEO to be sacked for doing this, really I just despair. Murdoch is definitely part of MF's solution to its problems.