Member Info for longtimeinvestor

''Vodafone shares gain on Italian sale and share buyback''

https://www.sharesmagazine.co.uk/news/shares/vodafone-shares-gain-on-italian-sale-and-share-buyback

''Along with its Spanish business, the return it generates is less than the cost of funding its operations. It therefore makes sense to exit these underperforming markets''

https://uk.finance.yahoo.com/news/vodafone-share-price-despite-50-154700797.html

Dan

why is it that the vodafone market cap has increased since the announcement of the 4 Billion buyback - in your mind it would make no sense as you say that the valuation would go down.

''That disposal, along with other deals, has left Vodafone with a load of cash, €4 billion of which it will return to investors via buybacks. Predictably, investors cheered, the stock is up about 4% this morning.''

https://www.bloomberg.com/news/newsletters/2024-03-15/vodafone-plans-4-billion-share-buyback-after-asset-sales

Dan

''This is basic stuff, so please can we move from this nonsense. L.T.I. please give us a break, because you have not a clue what you are talking about.''

I think it is you who is coming out with nonsense. You have a lot to learn

''because there are less shares in circulation after cancelling the shares, each share will be worth about the same''

if they remain the same after spending 4 Billion euro, that would equate to a 4 Billion devaluation of Vodafone meaning the market cap falling from the current £19 Billion to

about £15.58 Billion.

THINK AGAIN - who on earth would be investing with that sort on devaluation.

I think you will find that the market will value Vodafone on it's profitability which will not be affected negatively with the sale of non performing assets.

The market cap is likely to remain at about the same level or increase from full year results time as the benefits of the vodafone investment materialises.

''FTSE could shed 100 points tomorrow.''

or not.

Last day of the financial year tomorrow . I will be topping up my ISA with the maximum amount asap in the new financial year, as I have done with PEPS/ISA's for the last 37 years.

May 14th is the next date of significance - hopefully will get a more accurate timing for the start of the buyback

Kr

are you a shareholder? if so are you selling ?

Kr

i expect if you are a shareholder you will be contemplating selling, with the 4 Billion 'devaluation' coming up

Kr

as i said -

Anyone who thinks that the Vodafone valuation is going to drop by 4 Billion euro (a large percentage of current market cap) maybe should stay clear for a couple of years.

Kr

''Anyone who thinks that a business can cannibalise itself to buy back it's shares and somehow be worth the same at the end of it with less shares in issue needs to start engaging their brain.''

you have a lot to learn

Anyone who thinks that the Vodafone valuation is going to drop by 4 Billion euro (a large percentage of current market cap) maybe should stay clear for a couple of years.

Kr

''then clearly it will be valued at less.''

why is that? - what value was the market placing on non performing assets that may have continued to deteriorate further , before a clear cash amount was offered.?

An asset is no good to a business if there is no return. Profitability of Vodafone will not be decreased from the asset sale, and the market likes profits on deployed assets.

The price per share has risen about over 10% from recent lows, despite some saying that the price would plummet further on an announcement of a dividend cut let alone a 50% cut.

4 Billion euro is being invested in Vodafone stock, not being paid as a 'special dividend'.

Each shareholder retaining their shares will see their percentage ownership increase by an amount , dependant on the reduction in share count.

From what you have posted you are expecting a depreciating of value effect during the course of the 4 Billion investment. I would be more than happy if the buybacks were conducted at these price levels throughout.

Rob

'' let's hope it can change direction''

that is the hope of the reset - selling non performing assets whilst they still had some value to someone, reducing the dividends and investing in the remainder of the Vodafone business that give a return via buybacks

LBP

''I’ll be back in the 40’''

and you are not going to profit from a 'short' because ?

Rob

''Lloyds have done massive buybacks, ok the share price is up at the moment, but not sure if the buybacks can take any credit for that''

Lloyds is my 2nd largest holding after HSBC

Buybacks have NOTHING to do with what the market values a business at (market cap).

The sole purpose of a buyback for cancellation is to reduce share capital.

The reduction of shares in issue will mean that the price per share will be higher than it would otherwise have been.

A share price could be lower as well as higher after shares have been removed from the market - determined by the valuation that the market places on the business.

Dan

''You don't get it do you?''

I think it is you - if same valuation - fewer shares = increase in price per share

Be

haven't time for your ballacks atm

Be

''we are selling under performing assets, that cash is going into the business, that would then theoretically be adjusted in the SP''

what? - the assets are already reflected in the share price

''What they do with that cash ...................''

we know what is being done with the cash - an investment in Vodafone shares

Dan

''L.T.I. If vod buys back 4 billion euro's of shares & cancel them, the market cap will reduce by 4 billion euro's.''

oh dear oh dear - I am not going through this in detail with yet another person.

The market cap will be whatever the market decides but it will not be 4 billion euro lower because of buybacks

''all companies would be be buying their own shares back ''

all companies should purchase their own stock if they feel it is way undervalued and is a better investment than elsewhere

Apple etc etc etc have done very well buying their own stock since flotation

Dan

''but this is cancelled out by the cost of buying those shares.''

nonsense - the value is transferred to the remaining shares.

''It depends whether the vod sp increases after the buy back or not. ''

what is all this 'after the buyback' ?

each days purchases has an effect, even if unnoticeable day to day.

''if we knew the shares were worth & could realise an sp of £1, but we don't know''

the market says they are worth 70p per hare - it is up to the individual investor whether they agree with that or not.