Member Info for fleccy

Jambone, the point I'm making is that it costs up to $50 Million to make a few 5nm test chips, before you even get to the full production stage, a 4nm Tapeout will be more expensive again. I don't know who came up with the expression "as cheap as chips", but it clearly doesn't apply to semiconductor chip design and build.

Th cost of manufacturing 4nm chips is f'ing expensive, read the Tapeout cost for a 5nm chip in the article linked to below.

"A tapeout of a 5-nanometer process costs $40 million to $50 million at a time"

https://www.granitefirm.com/blog/us/2023/04/29/cost-of-chip-foundry/

"e board of Quantum Blockchain Technologies (AIM: QBT) is pleased to announce that it has made the key decision to focus on the development of the more efficient 5nm Application-Specific Integrated Circuit (“ASIC”), rather than a 7nm ASIC (as announced on 5 November 2021), to use as its proprietary Bitcoin mining tool."

https://www.share-talk.com/quantum-blockchain-technologie-qbt-l-5nm-technology-for-proprietary-bitcoin-mining-asic/

So from 7nm to 5nm, now 4nm. Does anyone else find the moving goalposts a bit confusing?

Just to add to my last entry, the third party acting on behalf of VOD would have the option to purchase stock off book, or on exchange, so the market would struggle to see the likes of Goldman's, Morgan Stanley, or Barclays purchasing the stock through the various different channels. I also don't see the agent, acting on behalf of the purchaser, communicating their trades to the market, since they'd be risking severe reputational damage and lawsuits.

As far as Market Makers front running the price, I don't see that since VOD would use a similar strategy to Lloyds and let a third party purchase the shares as a low percentage of daily volume. The only way the market would get visibility of the shares purchased, would be if they cancelled them daily and reported it immediately, or cancelled at the end of the month and telegraphed it as part of the Total Voting Rights RNS's. Lloyds is a good example of how share buybacks can have a limited effect on the share price and I don't personally believe the share price would have been lower in the absence of buybacks; Of course VOD is a different beast to Lloyds, so the market may treat the stock differently in respect of pricing the stock during a buyback program.

UK rules don't allow Public Companies to do secret share buybacks unfortunately.

"If Amazon were to proceed, with the obvious intention to disrupt, for a period of time losing money would be of little concern, surely part of the disruptive tactic would be to speed up the use of an unlimited mobile account to supply BB to the home too."

If Amazon offered a below cost service, to drive other MVNO's out of business, then they'd be hauled up in front of the CMA in short order. I stated in my previous post that Amazon Prime subscription is £8.99 a month and can therefore be considered as a benchmark figure for the Prime service, therefore incorporating a mobile service cost into that figure would likely constitute predatory pricing and an abuse of market power; Other MVNO's would argue that the mobile service is a separate business/cost to Prime membership and accuse Amazon of cross subsidising the Mobile service and offering it below cost.

If Amazon wanted to use their brand to offer a mobile and broadband service, much like Sky, then there'd be nothing stopping them, but to incorporate a free mobile service into the Prime subscription just wouldn't happen, in my opinion.

Mesh, I'm not a big fan of buybacks myself, as I'm primarily a dividend investor. At some point though, if the price drops too low, then it must reach a tipping point where buybacks make more sense than dividends, since the opportunity to reduce their overall shares in issue will feed back into lower dividend costs when dividends are reinstated. I don't believe the price would drop to 50p, but it's an easy price to work with; At 50p a share, should Vodafone decide to suspend the dividend and divert the money into buybacks, they could purchase around 4 Billion shares a year which would mean they could reduce their shares in issue by 16 Billion shares in just 4 years, assuming the market decided to hold the stock down rather than re-rating upward; In reality the market would have to raise the share price well before the four years were up, since the top ten shareholders alone hold nearly 11 Billion shares and the top 20 shareholdings, including Vodafone Group plc Share Incentive Plan, add up to over 13.5 Billion shares. The biggest reason for not buying back, is that it would also grow the percentage holding of the top shareholders, making a takeover easier and more likely.

"& why 7p?"

I thought that too. The divi will come to around 3.8p, so where does the other 3.2p come from?

I look at it like this, at some point the share price has to bottom out and although the headlines might hype up the drop, it has little bearing on the day to day operations of the company. Maybe I'm in the minority in my way of thinking, but the share price dropping doesn't particularly worry me, as I have no need or inclination to sell my Vodafone shares.

My personal view is that the markets are organised to skew the odds in favour of the institutional investors, allowing them to move volumes on and off book to drive individual stock, or sector, pricing in whichever way they wish.

So how much could Vodafone's Market Cap drop to, who knows? There are currently 26.944 Billion shares circulating in the Market and If Vodafone dropped to 50p, the Market Cap would be around £13.497 Billion, disregarding treasury shares. Vodafone currently have around €11.628 in cash and cash equivalents, so If they stopped dividend payments and directed the cash into buybacks instead, they could dramatically reduce the number of shares in issue and theoretically raising the stock price; The market would then have two choices, it could either lift the price, or allow the company to mop up stock over time at a low price. If Vodafone was at risk of going bust I'd be worried, but I don't see that; Worst case they could stop the dividends and use the cash elsewhere, but in the meantime I'll keep collecting the dividends, thank you very much 💰.

"But Openreach is estimated to be worth £23billion as a separate entity, even on a conservative basis, with some even citing £40billion, given that full-fibre is a superior technology, cheaper to maintain than copper.

Analysts have set an average target share price of 192p, suggesting BT could deliver. The dividend yield of 5 per cent presents a persuasive argument to buy more shares, especially as transformation could significantly boost this return."

https://www.thisismoney.co.uk/money/investing/article-12153317/Why-good-talk-telecoms-giant-BT.html

Actually I understand things quite well. Amazon Prime is currently £8.99 a month, assuming Amazon included the mobile service as part of the subscription they'd have to pay a mobile provider a wholesale MVNO price for providing service. For customers already on Amazon Prime, Amazon would then lose whatever the difference is between the Prime price and whatever they're paying the mobile provider.

Me and my Wife don't have a Prime account, but our daughter does, as does our Son, If we need to order something from Amazon that has delivery charges, we just get one of the kids to order it and pay them via bank transfer, anything with free delivery I just order myself, so we don't need an Amazon Prime account in our house. Even in houses where one person has an Amazon Prime account, you can bet there are other's in the household also using mobiles, so the best Amazon could hope for is maybe one mobile per household and in many cases it'll probably be houses with an existing Amazon Prime account anyway; Under those circumstance a current MVNO may lose a customer, but Amazon would lose as much for providing the free mobile service.

MVNO's also need to look after their own customer service, so Amazon would have to invest in call Centre staff and systems allowing them to look after billing, fault enquiries, etc, or pay someone else to take care of that for them. I'm not sure Amazon would be able to offer the service free and inclusive of the current Amazon Prime subscription charge, so they might not attract as many new customers as you think. The other MVNO's will also probably undercut them on service charges to hold on to their existing customers, as well as offering other sweeteners like extra data, etc.

Something else, I'm not sure if I saw it on CNBC or read it somewhere, but someone suggested that Amazon could have agreements with different providers and offer a service superior to others, but that'd be massively expensive as they'd have to pay different providers for wholesale service, with duplication in many areas; That was from someone who's supposed to know what they're talking about.

This whole thing is just a nothing story, just like the hype suggesting that VMO2 would take over Talk Talk. These days there's so much codswallop out there it defies belief, but some actually believe it.

"So everyone who has bought since Nov 1997?"

What about the divi's since then? Haven't they got to be worth something?

This isn't a threat to any mobile provider, the only way Amazon could provide service is through MVNO deals with the current providers and that will be priced similarly to other MVNO wholesale deals. I'm currently paying under £7 a month for an unlimited 4G sim only package, with 5Gb per month data; Amazon would have to compete on price with the other MVNO's like Plusnet, Sky, etc. VMO2 wouldn't want to give Amazon a good deal either, because Amazon would then be in direct competition with Virgin Mobile; To add to all that, you've got entities like Tesco Mobile on the retail side of things, so Amazon would struggle big time in the UK. The market's either hugely misreading the significance of this, or they're just using it as an excuse to knock the sector stock prices down.

Also, DT are getting a worse hit due to their T Mobile US investment.

Stupid Algo's and traders, making more out of Amazon speculation in the US than it deserves. Just an excuse to knock Telecom stocks down.

They're about to discuss Amazon on CNBC.

"Oh look the SP is down again today when almost everything else is up"

Gary are you stupid,? You should read what's been happening today before you use your throw away remarks. The reason for todays drop is no reason at all, it was caused by speculation about Amazon offering mobile services in the US, through MVNO's, with the market proving it's as thick as mince too.

I don't see how Amazon offering a mobile service hurts the US Telecom companies, as the Telecom companies benefit through Wholesale business and the UK are doubly unaffected anyway, since the headlines don't even apply to the UK. It's just another excuse to knock Telecom stocks so big players can mop up stock on the cheap, from weak retail.

The UK is awash with MVNO's, my SIM only contract is under £7 with Plusnet, and many other SIM only deals are available. If Amazon wanted to offer free mobile to UK consumers, they's still have to pay the mobile providers. When 5G rollout's completed, more options will open up for MVNO's through network slicing, but again it wont be free.

Wasn't even a drop on high volumes.

Today's price drops are a PRIME example of a stupid market.