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Are you saying that he's not worrying about the ongoing share price drop and the impact on the large trade he made?
Come on! This is a serious bit of post tax dosh to invest, he'll be hitting refresh every 5 minutes! Probably joined on here as well waiting for some good news articles :-).
I bought in 6 months ago for 1.15 so whilst I am in the red, I can't complain. I also took once recent dividend which I invested elsewhere.
I do believe in a turnaround, which is why I bought in.
BT operates mainly in the UK where its widely acknowledged that economies of scale for 5G require reduction to 3 Operators. UK is the only European market which is actively working on this. UK govt will want to stay ahead of the 5G curve, especially as its out of EU and I expect the VF-Three merger to be approved eventually.
Splitting the pie 3 ways is a huge upside for every Telco in UK, there is no two ways about it. That is my long term reasoning.
Short term - there are many big backers who are hugely in the red. There is a decent chance one of them will decide to make a bid rather than sit on the loss. Any bid would result in the losers having to write down billions in asset value they will never get back the original investment . So its a game and we got to wait it out.
"If I have a company worth £10 million and it has 10 millions shares at a £1 each, using £5 million of the companies cash to buy back 5 million shares means I'm left with a company worth £5million with 5 million shares worth £1 each."
What about if I have a company with 60million assets and 50 million debt? I sell 5 million assets, use the cash to buy back shares. I now have company worth 55 milion with 50 million debt. Does that look better to potential investor?
Now the clever ones here will say "ahh but those assets were not paying their way". And this is where we disagree. Not everyone can run a Telco or Google or SpaceX. I can guarantee you in the right hands those "worthless" assets will pay their way. Zegona and Swisscom know how to make it successful, Vodafone doesn't. This is not my view, look at their share price in last 5 days and look at Vodafone. Don't be fooled by the "finance strategy", this remains a Telecom who doesn't know how to run a profitable business in Europe.
Starting to wipe out gains within a day of announcement - typical Vodafone.
My explanation:- on paper it looks OK so immediate reaction is positive. Market however has no trust in the management to execute the plan so as soon as price is up too many investors sell up.
Just look at the comments on this board - how many would give their right nut sack just to reach their break-even point and walk away. Not enough investors actually want to be here in 3 years time expecting solid returns.
IMO, this is down to the board and their lack of vision. Hard to get excited about a business when the best announcement is selling core business units and doing buybacks. Or job cuts and another partnership with Accenture (look at the management gravy train between Accenture and Vodafone if you think this is not cronyism - they've been doing this since 2010).
What would happen if Apple or Netflix announced they can't make a profit in Europe so they need to cut back and focus on other markets. There would be a plunge in share price, a change in CEO to one with new ideas and better promises and a solid recovery.
Like with BT, main hope here is eventual takeover and I do think this will come - only question is at which level. Without some change in how business is done, this will continue drifting.
It actually works out at 0.86p a share
19,045,220,000/(27,079,994,208-5,000,000,000) = 0.86
Alternative is that company is then valued at 16billion and share price remains the same.
Interesting addendum on Italy sale with the annual maintenance charge of €350m for 5 years (minimum). Not sure why this has not been included in the original announcement - I can see this run and run as mergers at this level are incredibly long winded.
I don't have a short, I sold my position at 71.5. You can scroll down and see me say this at the time. I would not short it as there is a small perpetual chance of takeover.
I have no regrets about selling - if it goes back to 80s or 90s I have stock options I haven't exercised. if share price end up at £1 or £2 we are both winners.
My problem is the skill of current management. I maintain that success in Spain or Italy requires the same mindset as success in Germany or UK. They are selling core business as they don't know how to turn it around, so why should the market trust them?
Feel free to disagree if you think that MDV and the board are capable - everyone is entitled to opinion.
Overall, I do not see much to be positive about following this.
Vodafone DE - negative. CEO leaving indicates negative expectations for that market - i.e. they are acting now so they can announce "late turnaround" in May ("we may have missed the targets but next year...."
Restructuring - neutral, necessary by the sale of major business units.
Buybacks - negative. Exactly the same strategy that Nick Read started in 2022. It wasn't a success then so I doubt it will be success now. At least we know now whose idea it was.
Dividend cut - negative. Its a signal that current share price is not a blip but the new base.
Growth - negative. They are cutting their losses as they do not know how to grow core assets. There is no excuse for this. Please keep in mind - these are core assets - Vodafone is a telecoms operator who does not know how to run a profitable business in Italy and Spain (prosperous European countries which haven't had any major disasters in decades). No excuse for this whatsoever.
No I am not jax. I have an interest in the stock as an an insider (i.e. employee)
I am positive on Telcos, but negative on MDV - you can probably tell from my posts. I do not like the management style and I can't forgive the poor decisions made in the last decade. Best thing for Vodafone would be new board with a different style and leadership - I think we all agree on this. So thats where I am at, still think Telcos have a bright future but not the present management.
Starlink will replace mobile telecoms? If that was successful, government would introduce spectrum charges, bring new regulator who will provide incentives to introduce competition. Then they will start controlling the margins , insisting on MVNOs and it will be the new telecoms.
I am sure Starlink understand this and has no intention of ever scaling up. Much better to be a niche product with high margins and low regulations.