Member Info for fleccy

I haven't followed Discovery, so I didn't know much about them, but they appear to be part of bigger US merger action.

"The new company is the result of AT&T spinning off WarnerMedia, which owns a variety of major media properties including CNN, TBS, TNT, Warner Bros. film and television studio and HBO, into a new company. That company is merging with Discovery, which owns Discovery Channel, Animal Planet, TLC, the Food Network and various other media properties.
AT&T will receive $43 billion worth of cash, debt securities and WarnerMedia's retention of debt. The new company will be led by Discovery CEO David Zaslav."

https://www.nbcnews.com/media/discovery-warnermedia-merge-creating-one-largest-us-media-companies-rcna940

"Must say the news today about exclusive negotiations with Discovery doesn't fill me with confidence from a purely retail perspective as I dont know a single person that wants to watch Eurosport ever."

I'm not a big sport fan, but you miss the point of the anoncement in my opinion. BT sport will be offloaded into a new Joint Venture, becoming a streaming competitor to DAZN and Sky Sport. Discovery acually own Eurosport.

"Retaining BT Sport a big negative for price this am"

I don't read it like that, I read that they're aming to form a JV with Eurosport and Discovery, which probably means a spin off of sport rather than a sale.

"disappointing - big drop at open I imagine"

I think they look pretty good, the market was expecting a hit on Global and Enter[prise, and EBITDA is up even though revenue is down. The market seems more focused on FTTP and 5G rollout, which looks good. The share price may drop, as it usually does, but it wont necessarily be because of the results. Much will depend on what the vested interest market media focus on. It could go either way at the open in my opinion.

Does this mean a DAZN deal is off the table?

"We can't let that nasty mole-man get the better of us can we!!!"

He seems to think Starlink is in some way an issue for terrestrial Telecom providers. The problem for starlink is the higher mm wave frequencies are severly attenuated by atmospherics, "when millimeter waves traveling through the atmosphere are absorbed by molecules of oxygen, water vapor and other gaseous atmospheric constituents". This means Starlink will have to use the lower frequencies for communication with individual customer equipments. I've sort of come around to LEO services, but it will have its limitations and no competition for terrestrial communications.

"fleccy, If I could have done more than 1 recommend for your post I would have .I like the way you agree when you need to, but as you say, why do you think vod is not undervalued?"

Are you talking about this sentence?
"You're correct in nearly everything you've posted, but nothing you've said suggests that Vodafone isn't currently undervalued."

I think I changed that sentence after I drafted it, and probably forgot to change that word. I think I meant nothing to suggest Vodafone is currently undervalued lol.

"Cashing out to wait for next scheme is no longer an option. The rules got changed , I'm not sure whether by BT or an HMRC rule"

You may be right on that, I found this on the web:

"Will I be able to join a new Sharesave Contract if I cancel a previous scheme?
Sharesave schemes currently allow you to contribute a maximum of £500 per month. From and including the 2016 grant onwards, if you start a Sharesave contract and then cancel it before the maturity date, the amount of that cancelled monthly contribution will count towards your maximum, until the maturity date of the cancelled option is reached.
If you want to leave a grant made in or after 2016 in order to join a cheaper grant, you will need to check that you are able to do so for the amount you want, before cancelling your option. You will only be affected if all your current and intended monthly contributions, including those for cancelled options which have not yet reached their maturity date, exceed £500.
For example, if you join Sharesave for the first time in a 2018 3 year plan and invest £250 per period and then subsequently cancel that plan you will only be able to invest a maximum of £250 into any future plans until 2021, the date that the 2018 3 year plan would have matured."

https://www.shareview.co.uk/Clients/mitchellsandbutlers/Documents/2018-FAQs-SAYE.pdf

When I did it, it was way before 2016, and the scheme only allowed a company maximum of £250 a month anyway. I have no idea what the limit is on the BT sharesave scheme, but it looks as though you can still cancel a scheme and join a new one as long as you don't breach the HMRC £500 limit. If BT set their maximum at half the HMRC limit, as mine was, and you cancelled you could still invest £250 a month in a new scheme. The text pasted above explains it quite well.

"Three year term or five year term means you are not allowed to cash in, unless you left the company."

That wasn't my experience, In my case I just received the cash back I'd payed in. Obviously you miss out on the interest/terminal bonus that you'd get at the end of the scheme, but you should be able to cancel and take your cash at any time.

Equinti say:

"
What happens if I want to have my Sharesave savings repaid before the end of my savings period? How long will it be before I receive my savings?
You can withdraw your savings plus any applicable interest at any time and this money can be sent to you. If you choose to do this your savings account will be closed and you will not be able to buy your shares under option. You will need to notify your payroll to stop making any further deductions from your pay. Payment will be sent to you shortly after your account has been closed."

https://www.shareview.co.uk/4/Info/Portfolio/default/en/Home/help/employee/Pages/SAYECancelFAQs.aspx#:~:text=You%20can%20withdraw%20your%20savings,buy%20your%20shares%20under%20option.

"If you're a BT employee why would you buy BT shares outside of the BT schemes that are offered at a discount to the market value!!"

I actually cashed out of a sharesave scheme DT, during my employment. Companies and HMRC limit the maximum amount you can invest in sharesaves, which are often over 3 or 5 years. Like a lot of people in sharesaves, I'd taken the maximum allowable amount of investment in a scheme, and two thirds of the way through the shares had fallen well below my discounted price. A new sharesave was coming up, and I wanted to ditch my existing scheme to allow full investment in the new discounted scheme, so I cashed in the current scheme, used the cash to buy shares on the market at the current price, and entered the new scheme as soon as it became available. It was a no brainer at the time, as I collected as many shares via the open market, with the cash recovered from the existing sharesave scheme, even though it was less cash than I would have invested through the scheme; And it allowed me to invest in the new scheme.

"It's a pure-and-simple utility and deserves to be valued as such. Don't be fooled!"

You're correct in nearly everything you've posted, but nothing you've said suggests that Vodafone isn't currently undervalued. How do you know that Vodafone wont climb back into the £2 plus area in the next year, or two? You can often see re-ratings of undervalued sectors, and individual stocks, leading to significant raising of stock prices. I believe Telecoms is currently underrated, with the big market players forcing many strong telecom companies into the value bucket, and collecting stock on the quiet, just my opinion.
IOT and increasing bandwidth requirements will become prominent in the next ten years. Clearly Telecom and Cloud networks, in their current form, wont be able to cope with the increased bandwidth requirements of 5G and FTTP, so they'll have to find some sort of distributed Cloud server model, where the servers will need to close to users. Since the networks will eventually have to deal with continuous throughput of thousands of Petabytes per second, a cloud server model with servers in other countries, or even regions wont work, and I believe the Telecom companies will get big opportunities around hosting, since they're located geographically local to their customers; Even if the Telecom comanies don't grab all the cloud business, there'd be substantial revenue from connectivity to the required server farms. As far as IOT is concerned, latency is really important when it comes to monitoring and control, things like driverless cars and traffic control systems, so again the servers need to be close to the user equipment.
In my opinion, Telecom providers will become ever more important, and required, as time goes on, and Network Bandwidth ramps up tipping into continuous thousands of Petabyte throughputs. Clearly a server in Iceland, serving customers in the UK, wont cut it once the Continous Network bandwidth's hit a certain point.

I've taken a look at Cevian, and there's a few key points that caught my eye:

"Cevian (i) acquires substantial minority ownership positions in undervalued European listed companies and (ii) works with the boards and management teams of those companies to advance initiatives designed to increase their long-term competitiveness, profitability and sustainability."

"Cevian generally invests in sound companies that are overlooked, misunderstood or out-of-favor with investors."

" It is typically the largest or second largest owner of its portfolio companies. Cevian has a clear vision of the potential of each of its companies, and commonly maintains its commitment to companies for 5+ years.

Cevian’s optimal investment size is EUR 500m to EUR 1.5 billion per company, though larger investments are not excluded."

https://www.ceviancapital.com/strategy/

EUR 1.5 billion is around £1.25 Billion, and assuming an average purchase price of around £1.20, we could assume they may have purchased around 1 to 1.25 Billion shares, assuming they invested the full £1.25 Billion, or 3.6 to 4.6%. In the abscence of an RNS, I'm assuming their undisclosed purchase was sub 3%.

"No sunshine with this share - we all know whats going to happen . We will probably beat estimates and drop like the last 3 years"

In my opinion, the Telecom sector has been beaten down to allow big players to sweep up stock on the cheap. To back up what I've just stated, you only have to look at the Billion directed into UK Altnets, yet we're led to believe that Telecoms don't deserve fair valuations. Telecoms are set become must own stocks over the next decade, in my opinion, due to the future dependency of 5G IOT devices and applications. Everything will be monitored,or controlled, in the not too distant future, and 5G will be used for much of the communications to the various devices; Things like driverless cars, Traffic control systems, and any other metro wide applications will likely use 5G IOT, and estimates put the IOT market at around $1 Trillion by 2030, with much of that going to Telecom providers.

"Fleecy, its been reported on substantially in the Dow Jones & Bloomberg today as well as the FT etc over here."

Actually it's Fleccy. I hold over 70,000 shares in Vodafone, so i'm not speaking as someone trying to knock Vodafone in any way. All I'm saying, is that i've seen no proof that the rumour is real. Normally an RNS would be triggered once an individual, or fund, purchases more than 3% of a company, but I've seen nothing to indicate Cevian have built a substantial holding other than speculative articles.
Drahi built a stake in BT, apparently using derivatives, and probably topped up with a substantial purchase in the week of the RNS/announcements. Where is Cevians RNS onthe back of this speculation?

In the abscence of an RNS, I have my doubts about this Cevian story,
Have Cevian actually confirmed they've taken a stake in Vodafone?
The Guardian article said:
"Vodafone has been targeted by the activist investor Cevian, prompting speculation that the telecoms giant will come under pressure to overhaul its faltering global business.
The Swedish investment firm has built up holdings in Vodafone in recent months, according to sources quoted by Bloomberg, privately piling pressure on the firm to improve its performance."

The article suggests sources quoted by Bloomberg, but also says "Cevian and Vodafone did not comment.", so no official anouncement, just speculation.

https://www.theguardian.com/business/2022/jan/30/swedish-activist-investor-targets-vodafone-over-weak-performance

Has anyone seen anything substantive to suggest this is real, and not just speculation?

"I think you will find they have 3 days (possibly 5) to notify Vod of their acquisition. Then Vod have a time limit to notify the market though I would imagine this type of price sensitive information would be notified promptly."

If they have taken a stake more than 3%, then I would think the rules would require them to make any anouncement via an RNS, and disclosing the size of the stake; I would think the RNS would have been released ath the same time as the disclosed undisclosed stake lol, assuming it's a notifiable holding.

"Compare to the last hit piece the drop isn't this bad. Lets not forget that virgin media also will be doing their earnings result so they will have to tell shareholders they are doing something."

You could have predicted this drop, following the weekend articles around VMO2, as this is a repeating script. There was no reason for BT to drop this morning, as the FT article was just part of the the repeated narrative around VMO2 expanding their FTTP network, and even if it's true it's nothing new.

Funny how the FT article comes along a couple of days before the results, and the stock price drops in a climbing market today. The FT have form on this, and I can't help but think, today's fall in BT's price was scripted.

Where's an RNS, if Cevian have indeed bought a significant stake in Vodafone? This undisclosed stake can't be that significant, unless the RNS hasn't been reported as yet. I would class significant as something like Drahi's 12% purchase of BT stock. growing to 18%. Without an RNS, I'd have to assume the Cevian holding is less than 3%. Does anyone have any links to a site listing the Cevian holding? As they don't even appear in the top 10 on websites I've checked.

"Technically this should be a shot in the arm for BT. VMO2 have to find money from other outside investors because they have debt galore on their balance sheet, as Fleccy has said many times."

It sn't just the debt, the speed of the VMO2 merger was incredibly fast, and seemed rushed in my opinion. I'm not saying that the merger wasn't a good thing for their business, but the speed was breathaking, and with 18 Billion in debt loaded onto the new company, it's hardly surprising they're cash strapped. VMO2's revenue is around half that of BT's, and they have previously telegraphed they plan to spend £10 Billion on FTTP upgrades and rollout.
With CityFibre competing for Funds, the cut throat competitive Telecom environment, Openreach's Equinox offerings, etc, etc, etc, I would think it'll be hard going raising money; And why are they going down the the Investment Fund route, rather than raising cash via the Bond Markets? I can only guess why.