Member Info for ToffAppleton1

Bobet

‘then when a report about BT tightening their defence is published the other day, you were like a kid in a candy shop.’

Yes that’s right - investors do tend to buy into companies that are subject to substantiated rumor bids.

Am I any different?

Toff

Nigel

‘it doesn't matter what price the BT share price falls to, the BT BOD won't entertain a lowball offer’

If it was as easy as that to knock back a hostile takeover BT wouldn’t be paying millions in protection money to GS.

BT know it’s a lowball offer - £15 billion has been quite clearly publicized. We also know who the predators are - that’s why BT gave appointed an American bank to protect them.

The way these American PE sharks work is by approaching institutional investors and trying to get them onside, then show their hand when they think they’ve got enough support.

Hostile takeovers are often ugly affairs and drawn out sagas ( not unlike Lionel Messi’s transfer to Man City) - Freddie ‘psychopath’ Godwin’s Natwest takeover jumps to mind.

Having said that I believe any takeover of BT would be an uphill struggle. I wouldn’t want BT to be taken over by asset stripping sharks - I’d prefer to see the SP fall to ten bob rather than have that happen.

Even tho fair value is closer to two pound seventeen shillings and sixpence.

Toff:)

Nigel

“Didn't you think this a week ago, before you bought back in? Or was you expecting a big jump in the share price?”

To be honest I wasn’t sure what to think a week ago. Bid rumors usually make shareprices soar - but I didn’t get carried away - this is a share in a long term downward trend which has barely ever risen since it fell from £5.
I bought a small cautionary position with a view to adding to it if the SP fell.

Today’s post is more of a judgement call after some careful analysis. The SP looks like it’s going to go down, but the way I look at it I’m in at 109 and prepared not only to hold but double my stake if it continues to drop.

Whatever’s happening to the short term SP doesn’t mean BT’s chances of failing have risen, but that’s what the market is pricing in with it’s ridiculously low valuation. For me it’s a bet that BT will survive.

My judgement call is 109 and 90p if it continues to fall.

Toff

Nigel

“ I wish that someone would make a bid if it's only to stop the share price decline,”

Don’t you think any potential bidder would know this?
Of course they do, this is Gordon Gekko territory.
Let the rumor bid leak out and when no bid is forthcoming the share price tanks.

That’s Vulture fund psychology in play. They’re not about to oblige us by bidding now and propping up the SP.
Conversely, they’re using the rumored bid to drive the SP down even further. Disillusionment drives asset values down.

Toff ( Getting inside the mind of asset-stripping sharks)

Okay I’ve compared the ftse to the Dow since 1998

Now let’s compare its performance against the Dax

Average closing price for the Dax in 98 was - 5016
Average closing price for the ftse in 98 was - 5883

Today

Dax is 12964
Ftse is 5850

If it had been a football match Germany would have won 37-0

Toff

Fleecy

“The only bid that'd stand a chance would be a friendly bid”

When BT got wind of a takeover it certainly wasn’t from a friendly party. That’s why they hired GS to defend them.

Any bid that is forthcoming will be a hostile one. Don’t underestimate ugly American private equity firms - they are ruthless and will stop at nothing.

One thing I did find telling - and this is me at my investigative best - is that BT discontinued their ADR a few months ago.

As you know American Depositary Notes allow yankee investors to buy into UK stocks. It was an unusual move, maybe it was done to protect BT from predators? I can’t think of any other reason.

ADRs can also offer support for UK stocks

Imperial and Shell both bounced off their day lows today as soon as American markets opened; that was American investors buying into these two bombed out stocks.

Toff

If a rumor bid can’t lift the shares only an outright bid can. The market hates BT, shares are valued on sentiment and that’s why BT is so cheap.

If a bid fails to materialize the market will see it as a green light to mark the shareprice down aggressively. A rumored bid that doesn’t happen will be perceived as a negative and a catalyst for further falls. Any predator must be laughing at the continual decline because the lower a shareprice falls the cheaper any potential takeover becomes.

I’d be very surprised I’d BT falls below 80p
I intend to double up on my small position if it falls to 90p.

BT isn’t a company in terminal decline
It’s not a company with redundant technology.
At the current price it will pay to keep the faith.

A lot rides on how much you bought in for.
If you bought in anywhere near the current levels it’s highly unlikely you won’t make a decent profit (as long as you don’t sell too soon)

Toff

Good to see a pick up from 2.30 when American markets opened. Bargain hunters buying in via ADRs.

Otherwise uk market makers would have hammered it down to £12.

Isn’t it about time Imperial switched to US markets?

Toff

Uk market makers have hammered Shell down 60 percent since the killer virus came along.

Total
Chevron
Exxon

Have only fallen 27-33 percent.
Shell needs to quit the UK or it will be putting the company in serious jeopardy of a takeover for a lot less than its worth. It’s trading as though oil were $20 not $44

It’s time for Shell to relocate to the Dutch stock market to stop it being trashed by uk market makers. The only support today came from ADRs ( American buyers) who bought in at 2.30

Otherwise the MMs would have marked it for to £10

iPhone maker's sharesAAPL.O up 1.7% to $131.22; market cap crossed $2 trln recently, making it the most valuable publicly listed company
* AAPL is now more valuable than the Russell 2000 index.RUT , which measures the performance of the small-cap segment of the U.S. equity universe
* Russell 2000 had a market cap of $1.89 trln as of Monday's close.
* Apple's 4-for-1 stock split took effect on Monday, along with Tesla Inc's 5-for-1 split
* Tesla shares fell 3% to $483.14 on Tuesday after it announced a share sale of up to $5 bln
* While most market experts say stock splits don't matter as they have no impact on company fundamentals, the recent pickup in shareholder activity suggests otherwise

* Analysts at Bespoke Investment Group say since TSLA, AAPL announced stock splits at the end of July, their market cap has increased by a combined ~$700 bln
* Say AAPL's market cap boosted by blowout earnings and stock split, while TSLA's $190 bln add-on happened only on the split

While UK market makers are absolutely trashing ftse shares Apple has hit another all time high. And another hefty rise for the Nasdaq.

I’m thinking of starting a petition on yougov demanding parliament review the way uk shares are valued. Market makers may be waxing rich from dictating share prices but investors and pension funds are getting raped.

Toff

Nigel

“Buys 36M Sells 7M. share price down 2.82%. The worlds gone mad.“

A lot of people are sceptical of my claim that market makers set the price, not buy and sell volumes.

Uk markets are like a casino that’s allowed to choose its own cards. Investors may always lose but the MMs always win.

Since the coronavirus

That compares with 27-33 percent for other global oil majors (except BP)

That’s the cost of belonging to the ftse

Toff

I’ve always likened the ftse to a game of snakes and ladders.

Except the ftse board has a snake on every square and an absence of ladders.

It’s good to see that on a day when beaten down stocks are getting hammered into the ground that the two market maker darlings and most overvalued companies are rising again.

Ocado and ASOS

Ocado’s market capital is nearly twice that of BT’s now - and its never made a profit.

Toff

Nigel

“Toff, based on the UK domestic shares the FTSE100 index should be priced a lot lower today than 1998“

I’d imagine ftse100 shares trade at much lower values today than back in 98, even though earnings must have risen substantially, company shareprices have largely plummeted.

The fact that 83 percent of postions on the index are long suggests most people think so. And herein the problem lies - market makers can’t possibly let that 83 percent win so they simply mark shares ever and ever low and clean up.

Toff

100

‘The FTSE has been helped by foreign miners like BHP, Rio Tinto etc in that time frame, what would be the real level be if there were no delegations.’

Absolutely bang on the nail. Miners have risen precipitously since 1998. If you strip that sector out of the index the ftse would actually be around 4200 now.

The index’s performance doesn’t bear thinking about. Investors would be hundreds of billions to the better if they hadn’t invested.

Toff

Fleecy

‘It can't just be me currently sitting on big losses’

Anyone foolish enough to buy into the ftse must be sitting on huge losses. You don’t need much exposure for your capital to be decimated.

If you’d bought into Lloyds, Shell and dozens of other shares only recently you’re looking at a whopping 50 percent loss. And because of the esoteric nature of numbers those shares have to rise 100 percent to get back from where they fell.

The Permabear 100 is an engine of wealth destruction. An index of ever decreasing valuations; an index in a terminal death spiral.

And unlike others markets it never rises. It’s a war of attrition against market makers who make massive profits by wiping out long investors.

As the saying goes ‘ market makers can remain irrational longer than you can remain solvent’

1998

Dow - 8400
Ftse - 5900

Today

Dow - 28450
Ftse - 5895

And those numbers say it all

New

“Once again, FTSE and pension pots being crushed”

The market makers can’t let the Permabear 100 rise because 82 percent of bets on it are long. Unlike the roulette wheel and horses they decide the outcome. All they have to do is continuously mark stocks down and take people’s money.

Take Shell & BP for example.
The MMS have marked them down 55 percent since the crisis.
Exxon
Chevron
Total
Have only lost 27-33 percent.

That’s the price you pay for investing in a crooked market. And that awful statistic is mirrored throughout the ftse.

Toff

Fleecy

‘I'm quite sure DT wont settle for 151p, or 300p considering the EE deal was completed when BT was around 440p’

£3 would easily be enough to take BT out. A bidder probably wouldn’t need to go that high. Any bid would be based on the reality of the current shareprice, not numbers from the past.
That’s why BT is attraction takeover attention - because a buyout premium of 50-75 percent is usually enough for it to succeed.

Of course any bid would be subject to shareholder approval by way of a vote.

The best case scenario the way I see it would be a failed bid. It would lift the shareprice and put a floor under it and the company would avoid falling victim to double-jive-talking asset-strippers. The £40 Buffett bid for Unilever certainly lifted their shareprice- it’s rarely been below £40 since the old sage’s audacious bid. Unilever was another beaten down, undervalued company before that bid.

Toff