Member Info for ToffAppleton1

Skier

“The bankers will be all over this, like bees on a honeypot.

cash in the pot for a juicy one-time dividend

clear the pension deficit in one swipe,

The CEO fills his boots with stock,

Anyone who has ever watched Wolf of Wall Street will know how these things work“

Wow; what a lot of cliches. I’ve never seen so much hysteria in one post. Hysteria is endemic in herd animals. Anyone who ever watched Wolf of Wall Street will know that the trader was a wolf feasting on lambs.

Openreach is BT’s main source of revenue so any sale/partial sale will impact on revenue. Openreach is the jewel in BT’s crown.

Toff

The elephant in the room surrounding any open reach sale is Ofcom. Like many other companies of recent, slimy dog-whistle politicians have politicized them for personal gain and to win popular support from undereducated plebs.

Any suitor for openreach would be up against these cretins and I can’t see any third party wanting to be dictated to by those misfits.

I’m a firm believer that private companies should remain private - and meddling politicians should Keep Out!

The government price caps have destroyed Centrica and put 30,000 jobs on the line.
William Hill want to close all their betting shops down because government regulations have made them unviable - putting thousands more jobs in jeopardy.

And they’ve also forced many companies who could easily afford to pay dividends to cancel them in an unprecedented act of sickening moral meddling.

I fear this is the shape of things to come in this country. Meddling politicians out to further their own agendas at the expense of tens of thousands of jobs. Orwellian Big Brother taking care of the public - and doing untold amounts of damage to them while doing so.

That’s why I don’t think openreach will be an easy sell.

Toff

Bkk

“Your right it screws your head up but best not think about it just think longterm”

Anyone thinking long term 4-5 years ago who bought in at £3 £4 £5 must have really screwed up heads with the shareprice at £1

I’m not passing judgement on BT, I’m just making a point. Long term is often loser’s solace, put bluntly - it’s delusional driven by self-denial.

IMO Those buying in at current levels stand a decent chance of making money over the next year or two, but it’s unlikely many who bought in at the aforementioned prices will ever break even in their lifetimes.

Toff

Nige

‘Toff, What did you make of the BT pension deficit in the results? I know that you were predicting a deficit of £10bln.‘

Yes I saw that. My sources put the deficit at £1.3 billion, but it’s an impressive drop. Looking at the detail, the figure can fluctuate wildly so I’m expecting it to rise by June when they update. I’m think I’m right in saying the size of their pension fund is £52.3 billion.

Toff

That’s it. Second short closed @103

£500 profit
Making a total of £1250 for my call on BT.

Can’t see it going much lower from here. £1 has to be strong support level IMO

Might even take out a long position if it drops into the low 90s

Toff

Bkk

‘I'm surprised there has not been a merger or takeover but early days if that was to accure
I thought a equity group would have moved in to takeover and break up bt
Just a opinion of course‘

Dear me! And a very ill-formed opinion. Originating from desperation rather than rational. If a miracle on a biblical scale were to happen and BT were to be the subject of a takeover, it wouldn’t be private equity it would be another major telecoms player (AT&T)

I did predict when the dividend was cancelled the topic of a takeover would dominate this chat board.

Good rise for BT today, lifted by Vodafone’s market beating results. And they kept their dividend - a real rarity in today’s environment.

Toff

Mobily

Any quarantine measures will be temporary. The UK will have to comply with international regulations when the situation normalizes. You can’t set your own standards in a global industry.

Toff

Nige

‘If my memory serves me correctly Toff, when you sold BT you made a loss of £200’

No I’m afraid your memory doesn’t serve you. You’ll find no mention of a £200 lost anywhere in my posting history. I traded BT numerous times when it was at the £3 level and always made money. Then I ended up with a small position at £2.70, held them for ages and picked up some dividends. Those were the ones I sold. All told I don’t know how much I lost but it was a damn sight more than £200

I still have one short position open @113. I’m looking to close that next week as I don’t like to keep short positions open for more than a few days.

Toff

Nige

“now the time that you should be going long with BT? “

As you probably remember I sold my small BT holding at 134 a few weeks ago and turned a ‘paper loss’ into a monetary one.

But I am indeed thinking of buying back in. Although the dividend cut is bad news for those who bought in at £2-5 it’s a positive for those buying in now.

At the closing price on Friday I could have bought about 28 percent more shares back for the same money I got when I sold. That proves that paper losses turned into monetary ones are sometimes very beneficial. The values of a share certificate changes everyday but the number of shares remains on it the same. And the number of shares I’ll have if I buy in again will be far greater.

I’m going to wait and see what happens next week. I’m expecting it to find strong support level at £1 and test 98p. If that support level holds I could well buy.

Toff

The pandemic has provided the perfect pretext to slash and cancel dividends - sometimes rightly so but not always. As we’ve seen with ASOS & Wetherspoons recently, dividend cancelations have been quickly followed by capital raising. ( both of the aforementioned companies did it rapidly through institutional investors) I expect a lot more companies to follow suit when the dust settles on the pandemic.

I’m not saying BT will go cap in hand to its investors anytime soon, but it’s likely they will at some point.
Even without dividend payouts, the business is cash hungry - its commitments and obligations are substantial.

Bearing in mind capital raising is easier and more financially rewarding when the shareprice is higher, it wouldn’t surprise me if BT don’t spring a rights issue on the market in a year from now. I expect the shareprice to be closer to £2 than £1 in a year and the higher shareprice could force the board’s hand. And I’d expect any rights issue to include all shareholders, not just II. And what better time to do it, while the pandemic is still fresh in people’s minds.

Toff

Bkk

“I was suprised only to see the 10p drop”

It was indeed fortunate that the ftse rise 82 points today. If it had had a bad day or even a flat day BT’s losses would have been greater.

It’s what’s known as a top down perspective.

Some on here probably remember when BT fell to £3. It found support at that level for a few months.
I’m waiting to see if it’ll do the same at £1 - if it does it’ll be a good opportunity to trade for short term upside.

I think it will find support at £1 but it will test 97-98p first.

Toff

Getting Ahold of itself TAKING A BTING. Chief executives abhor cutting dividends – even if it’s obviously sensible. Especially so in Britain, where income-obsessed fund managers focus myopically on payouts even if they bleed a company of cash to invest. BT’s Philip Jansen has resisted those pressures, announcing on Thursday that he would suspend the final dividend for the financial year that ended in March, and for the current one. Shares took a hit.

The cut was mathematically inevitable. At the old 15.4 pence per share rate, dividends cost 1.5 billion pounds a year. That compares with about 2 billion pounds of free cash flow, which also covers pension payments to the tune of 800 million pounds or so. By slashing dividends, Jansen has made sure he can invest in fibre broadband – which matters as rivals O2 and Virgin Media bulk up.

Toff

Post from 2nd May

Emm

“something like 12p a share per annum for this year if earnings estimates accurate, which will still give 9/10 per cent yield on current sp and a dividend””cover that is affordable.”

That’s never going to happen. When dividends reach those levels they become red flags. If you know your market history you’ll know that those payouts never materialize.

________________________

A lesson for the learning demonstrated by

Toff

Post from Tuesday

“Doubled up as I said I would.
Second short added @117”

___________________________
Closed @102 Net profit £750

Short position @113 still open

Waiting for the dead cat bounce to fizzle

Toff

Cherry

“A dividend cut to say 7p per share will be enough for me to buy in”

Both Shell & Aviva got smashed for cutting and canceling their dividends. Not once but repeatedly - beaten down mercilessly. When companies cancel dividends income funds dump them and that applies downward pressure.

My thoughts on BT dividend is if it does get cut to 5p the market will act favorably; perceiving it as prudence. But if it were to be cancelled altogether- well that’d be a different story.

Must be a lot of nerves out there among BT shareholders.

Toff

Just to highlight anomalies in the way the market values shares...

Astra Zeneca trades at over 13 times book value
Compared with 1.13 for BT

And it’s gets more obscene when you look at Ocado
now valued at £12.5 billion
More than BT. More than Sainsbury Morrisons M&S and one or two others combined.
And yet to make a profit
You have to ask yourself how that valuation is justified for a company with a business model where any profits are going to be wafer thin.

Ocado might just as well be a cryptocurrency or a tulip because it doesn’t trade on any metric other than madness - buying and selling to a bigger fool.

Toff

Is now the UK’s most valuable company by market capital. Bigger than the oil majors, bigger than the world’s biggest mining companies, bigger than HSBC , Europe’s biggest. Bigger than Glaxo.

Another example how markets value all shares differently. Astra is valued on a different metric - one of psychology rather than logic. With a p/e of 119 or 92 depending on whether you believe IG or Bloomberg - the valuation looks obscene.

Still - as I’ve said before - shareprices are socially structured realities - forget fundamentals. It’s important to remember that when trading shares.

Astra used to be a minnow in the pharmaceutical sector, dwarfed by Glaxo. A £30 share that’s tripled.

Personally I can’t see it hold the crown for the UK’s biggest company for long. But until sanity is restored it is.

Toff

Nige

But so far you're only holding a paper loss. Lol

Yes, but my paper loss is a penny or two. Your’s are in £££££

If fleecy’s dream becomes reality Buffett will make a £4 a share offer on Thursday and I’ll really get screwed LOL

Nige

My bet won’t be decided until Thursday when the results are released. It’s a bet on a dividend cancelation/or two thirds cut: falling revenue: increased debt: widening pension deficit.

I know it could go the other way. I won’t keep the position open if it does. Depending on what price it closes I’ll place a stop loss. Stop losses aren’t guaranteed to execute of course if the shareprice opens higher

Toff

Doubled up as I said I would.
Second short added @117

Toff