Member Info for ToffAppleton1

If a consortium is targeting BT as numerous press articles have suggested, it will be similar to the ABN takeover in 2008, when RBS led a triumvirate consortium, which included Dutch bank Fortis and Spain's Santander.

They divided ABN into three parts, which each bank would take over. Any BT takeover would follow the same pattern. BT has very distinctive parts, all of which could be run as separate businesses.

Openreach
EE mobile
Telecoms
BT sport

So IMO BT could split into 3-4 autonomous businesses. PE firms would undoubtedly float them on the market at some future time and make a huge profit.

One things sure - the sum of BT’s parts are worth far in excess of £10 billion.

Toff

Another factor to bear in mind

Is that the shareprice always exceeds any takeover bid offer...

Because market makers anticipate..

Counter bids
Higher bids by existing bidders.

And that’s a stonewall fact

Toff

Velo

‘Don't think Buffett actually got as far as a bid (did he talk of £50?’

Bid was tabled at £40

£44 was then offered to the board

Rejected out of hand - it undervalued the company (Buffett is a bottom feeder)

The upshot was that it put a more or less solid £40 floor under the shareprice

The same would happen to BT. Barring a catastrophe BT would never see £1 again

Toff

I’d imagine there’ll be a wall of money from institutional investors waiting to buy BT on Monday morning. If it opens at 125 that’s still cheap as chips. It’ll need to go far higher to deter institutional buyers.

What a pity you can’t buy on Sunday at Friday’s closing price:(

Are you ready for the stampede!

Toff

Aus

‘If you are buying in, might want to let them drag the price down first?’

Shorters will be buyers on Monday not sellers. That’s why short-squeezes drive shareprices UP dramatically. I don’t think BT is heavily shorted but if it was the price would go through the roof.

Remember shorters are buyers too - the only difference is that they sell first.

Market makers will be out to run a corner on Monday. Maybe you remember the short squeeze on Porsche all those years ago which drove the shareprice into the stratosphere.

Toff

Nige

“what price do you think we will open up at?”

Hopefully not too high because I’m looking to buy in.
It’ll be a delayed opening for BT on Monday morning while the auction is in progress - but I’ll hazard a guess at 125 and to finish the day quite a bit higher.

Nige

‘My money is on PIF’

Highly unlikely. The Saudi fund bought it as an investment not a takeover. Running a telecoms company would be beyond their sphere of expertise. A hotel chain yes but never a telecoms company.

Any initial bid will come from a consortium of private equity players.

Any counter-bid will come from rival telecoms - and stand a much better chance of succeeding.

Nige

You bet I am. I’m putting some funds in place for Monday morning

And let’s not forget - once a bid comes in other bidders come out of the woodwork - deutsche telecom would be compelled to make a counter-bid.

And more bidders would drive up the price.

Toff

Nige

“Would you care to put a price on it Toff?”

£2.25 a share would be a sound-out bid
£2.75 would be a serious bid - but not enough
£3 would sway the majority of shareholders to accept. (Still undervalued)

Toff

Thanks to the market makers smashing BT down to pennies, the company has now attracted the attention of predators looking to buy it on the cheap.

That’s not going to happen, but the f**ktards responsible for valuing BT are going to have to revalue it.

Market makers have hammered most Footsie companies into the ground with valuations of 3-5 times future earnings, so I doubt BT is the only company that predators are circling.

This should serve as a catalyst that obscenely cheap valuations set by morons will have far reaching consequences.

Although there’s been no formal bid, there’re bidders waiting in the wings. It’s not a rumor this is very real - and I’ve been informed that bidders are prepared to go considerably higher than £15 billion.

Toff

£15 billion is still peanuts. No chance of succeeding. But it will give the scumbag market makers a much needed kick in the groin. And I’d estimate a bid would raise the entire beaten down telecom sector. £2 by the end of next week?It wouldn’t surprise me. Rival companies are valuing BT now - not market makers. __________________The board of BT Group is preparing to defend it against takeover approaches from industry rivals and buyout firms after the suspension of its dividend prompted its shares to slump to their lowest level in more than a decade.Sky News has learnt that Britain's biggest telecoms group, which now has a market capitalisation of just £10.1bn, has asked bankers at Goldman Sachs to update its bid defence strategy in recent weeks.Robey Warshaw, a boutique headed by two of the City's leading investment bankers and a long-standing adviser to Vodafone, may also be asked by BT to play a role, according to insiders.Sources said this weekend that BT had not yet received a formal approach from any potential suitor.Any such overtures would, if they materialised, be regarded as politically explosive, with BT having committed to funding a £12bn investment programme to roll out superfast fibre broadband to 20 million premises across Britain by the end of the decade.

Vindy

“Should have waited for 20 per cent uptick but bought at 106 after bounce off 98 would do it.”

I don’t mean to be impertinent but your reasoning is crude hindsight bias. You weren’t to know the future shareprice movement but the fact you bought it when you did suggests you thought it was going to go up. Just like everyone else who’s bought in.

Another erroneous assumption among traders is that the shareprice will go up as soon as they’ve bought in. It does sometimes I know, but that’s more down to dumb luck than anything else.

People have been buying into BT because it’s ‘cheap’ since it fell to £3 - now look where we are. Spare a thought for those who paid £2-3-4-5 a share. I believe you’re in quite low so I’d rate the chances of getting your money back as high as 99 percent. Many will probably never see their money back in their lifetimes.

But it could be a long wait.

Toff

Longish

Always better to buy after ex dividend date after the market makers have finished hammering the shareprice into the floor.

Shell - 12p dividend - down 75p since ex-div
Glaxo - 19p dividend - down £1 since ex-div
Both went ex- div last week

Imperial is down about 50p so far but I expect the MMs to hammer it well into next week which could see £12

It doesn’t just get hammered for a day or two, its more like a week or two. Never used to work like this but MMs have conspired to ensure NO ONE makes money. And the only way they can do that is mark them down ever lower.

The most disturbing aspect of their behavior is that the mark down is PERMANENT for many shares.

How low can they go?
As low as what’s needed to ensure retail investors never make money!

Toff

Vindy

It’s not just BT who market makers are hammering into the ground; it’s every share of any value.

All the signals are screaming value shares are grossly underpriced. Look at the article below.
In my view value companies should have big funds put aside to buy back their own shares when market makers act like this and sell their shares for next to nothing. What better time to buy shares back when they’re priced at 3/4 times future earnings by a pack of scumbags who have no idea how to value shares.

______________________

Legend has it that sirens used to lure sailors into the rocks by singing irresistible songs.

Well if value investing was some kind of mermaid, it sure would be singing out of tune or the kind of blues that would scare off investors rather than lure them into a trap.

Not one day goes by without sell-side or buy-side analysts noticing that all the conditions are set for a new dawn for cheap stocks, and yet no one seems to be rushing into a segment that keeps on underperforming.

BOFA's flow show indicated that $1.5 billion exited U.S. value last week despite the bank's analysts noting a "bigger picture more positive for value".

Vincent Deluard at StoneX argued that while European value stocks "have been one of the worst investments in the past decade" they are now "the best trade to bet on a vaccine-driven recovery", noting all the macro stars (undervalued Euro, cheap commodities, falling USD, and political momentum) are lining up for the old continent".

It's quite a mainstream call at the moment and for instance UBS keeps the view that "value stocks that have the potential to catch up to the recent rally".

At Barclays, the strategy team noted that the new bull market brings in "conflicting messages" with "the leadership on the way up remains highly concentrated in a few large quality/growth stocks, while the value space keeps lagging".

And yes, looking at their recent performance, value stocks are singing the blues and few investors seem ready to sing along.

Air BB IPO rose 55 percent today to $33 a share
A worthless dog valued in the tens of billions.

This is like the dotcom bubble on steroids

American DumDums are doing the same to tech shares as they did to the property market that caused the financial crisis. The latest chapter in American disaster capitalism is it any wonder that the whole world detests them.

And now, as then, the world will have to clean up the mess left behind by Ugly Corporate America.

Toff

Vindy

“You seem to relish the Chinese taking over.“

No, don’t like either of those two countries nor the people. I was just being pragmatic. The US is terrified of rising Chinese dominance- they see it as a threat to their own. And rightly so because China will become the world’s largest economy- that’s inevitable.

That’s why Trump and his cohorts are doing their utmost to damage the Chinese economy with tariffs and the criminalization of Huawei - such as threatened EU nations if they don’t rip their infrastructure out.

America has got a track record of intimidating small nations and installing dictators in third world countries. China is shaping up the same way. As someone who’s spent a lot of time in SE Asia, I’ve seen countries like Cambodia and Lao become virtual Chinese provinces - to their detriment. The Chinese are universally despised in that part of the world, apart than by the dictators who rule them, because they sell their countries resources to them and pocket the lot.

In an ideal world there’d be no USA & no China
But unfortunately it’s not.

Toff

Fleecy

None of this really applies to the long term investor who wants to mop up lots of value stocks & tuck them away for 3 - 5 years.....imo"

Very True/

Really. Eighty percent of Footsie stocks are trading at far less than they were a LONG time ago.

Share trading is about timing not time.

Toff

Vindy

‘Tech in USA is very overvalued. I hope it does not pop and the fed keeps pumping money in.’

By pumping more money in they’ll also pump up the US tech bubble into evermore obscene valuations.

Because that’s where all the money's going.

The US brand of capitalism is a boom and bust variety, predicated on disaster capitalism and perpetual bubbles. Then when it all goes wrong the fed get the printing press out and print trillions of dollars.

But in my view there’re only so many times you can do this before it kills the currency. With the rise of China- the world might decide they’ve had enough of American DumDums destroying the global economy. They world would ditch the dollar and adopt the Chinese RMB as the global currency.

That would knock America on its ass.
And hopefully put a permanent end to their dominance.

Toff

Millie

Yes I remember the dotcom era well. Banks and brokerages crammed coke-snorting junkies into their trading offices and instructed them to buy anything with a .com in it.

Traditional stocks were given the derogatory name of ‘old economy stocks’ anything of value was sold off for peanuts. I suspect the same type of people are buying into the US tech mega-bubble now.

I’m glad it’s not my money they’re gambling with.
I wouldn’t walk in front of a moving bus, nor would I give one of those morons money to invest in catastrophic bubbles.