Vodafone

derrick

Chrismaths wrote:

Note to all: Please do not post any further in this thread. Despite multiple explanations, derrick will not accept that he has not relinquished any shares and seems incapable of grasping the simplest concepts. YOU ARE WASTING YOUR TIME.

And you will not accept that I have, had 3014, now have 2637,reliquished 377, simple maths!

WASTING TIME? you seem to have a lot of it

Charlton_Taz

I can't resist posting (sorry!)...

Would you be really happy if Vodafone said they were going to do a share split instead....say 2 for 1. That would mean your 2,637 shares would become 5,274 shares overnight!!! You will have gained 2,637 further shares....sounds fantastic doesn't it!!!

No!!!!

Because the share price will halve to compensate i.e to about £0.58 (at today's prices)....so nothing really changes!!!

derrick

Charlton_Taz wrote:

I can't resist posting (sorry!)...

Would you be really happy if Vodafone said they were going to do a share split instead....say 2 for 1. That would mean your 2,637 shares would become 5,274 shares overnight!!! You will have gained 2,637 further shares....sounds fantastic doesn't it!!!

No!!!!

Because the share price will halve to compensate i.e to about £0.58 (at today's prices)....so nothing really changes!!!

Would save me dealing charges to get back to my original share vloume,kept me the same capital in the company and saved the work involved in the con, so nothing needed to have changed.

Don't forget the share price has not gone up, which was supposed to happen, it has bloody well continued to drop!!!

Chrismaths

You were warned Charlton! He's happy getting himself all in a tizzy and blaming the world for the problems in his life. Leave him be.

Paul_Herring

I'll bite

derrick wrote:

From your link:-

Share consolidations
These are exactly the same as splits, except that you will have fewer shares worth more each rather than more shares worth less. Consolidations can be driven by events such as National Grid’s return of cash to shareholders, through takeovers, divisional sell-offs and so forth.



But they have DROPPED since the consolidation so makes a complete mockery, all my previous comments stand.

Right - lets try this way...

1) They have consolidated shares. They have reduced the number available by 1/8th. All other things being equal, this would result in the price of each remaining share to go up by a proportional amount.

This is what the section you quote is saying. However:

2) They withdrew 1/8th of the value of the company from the market and returned it to their shareholders. This has the effect of reducing the price shares available back to the level they were before consolidation.

This isn't mentioned in the bit you quote. So all other things being equal, the value of your stake in the comany is reduced by 1/8th. But as a proportion of the total holdings, it hasn't changed. The value of 1/8th of your former holdings on a particular date (31/7 in this case) have been reutrned to you as a dividend.

3) Market forces have forced the price of shares down to 115p today.

This raises various view points:
A) "I don't want the value of my stake in the company to decrease"
Well buy more shares to bring it up to your perceived required level. Vodaphone have paid out 1/8th of the value of the company that was sat in cash on the balance sheet as a special dividend. This reduces the value (ie market capitalisation) of Vodafone by 1/8. There is little you can do about it.

"I don't want the proportion of the company I own to change"
It hasn't. Every shareholder's holding has been reduced by 1/8th.

C) "I've lost 1/8th of (the number of) my shares"
Unless you're the type of person who requires their holdings in companies to be a prime number of shares, or rounds them up to the nearest 100, this is largely irrelevant.

D) "I want to choose the price when that 1/8th gets taken from the market - I think they were undervalued on 31st July"
This is irrelvant - They have paid out £7.5bn of CASH on their balance sheet. What price the shares are has no bearing on the value paid out - merely the percentage that value has in proportion to the worth of the company (i.e. the total of all the shares.) Let's say that on the day they declared the divi, the shares jumped to £2.30 (valuing the residual business at around £110bn), then the divi would have been about 1/16 of the value company.


Edit: Thanks to Chris for the corrections.

Hugeass304

Oh dear, I feel a bit guilty that I started this now. I think there is something to be learned here 'cos I, like Derrick, hold my shares in a nominee account with the halifax. Although they say the sent me an email I'm 99% sure they didn't unless it was hidden amonst one of there general "look what we do for you, look how good we are" type emails. Something like this should have been it's own email with possible followup emails if you hadn't responded. I wonder if the halifax has anything to gain from choosing for us, perhaps I'm being to cynical now

Chrismaths

Oh Paul, why did you do that???

Now I've got to post to correct some more (admittedly more slight) errors.

A) "I don't want the value of my stake in the company to decrease"
Well buy more shares to bring it up to your perceived required level. Vodaphone have bought back 1/8th of their company back off the public. There is little you can do about it.

They haven't bought it back. They have paid out 1/8th of the value of the company that was sat in cash on the balance sheet as a special dividend. This reduces the value (ie market capitalisation) of Vodafone by 1/8.

D) "I want to choose the price when that 1/8th gets taken from the market - I think they were undervalued on 31st July"
This is what I think you're complaining about since 1/8th of the company at 153p(Nov'05) is worth more than 1/8th of the company at 116p(31Jul06). You cannot individually pick and choose when they do this.

This is misleading. They have paid out £7.5bn of CASH on their balance sheet. What price the shares are is irrelevant. Let's say that on the day they declared the divi, the shares jumped to £2.30 (valuing the residual business at around £110bn), then the divi would have been about 1/16 of the value company. They would still have paid the same dividend rate, as that is how much cash they had at the time from the sale to Softbank of Voda Japan. However, you would still have held exactly the same assets (ie the network, the customers etc). So you would have had nominally more shares (2827 in derrick's case). However, when the next day everyone woke up and realised the residual business was actually still only worth £55bn (as they do today), the share price would have gone to around £1.075 instead of around £1.15 as it is today. So you'd be in an identical position. The effect on the company is invariate to price.

Otherwise, you are spot on!

Paul_Herring

Chrismaths wrote:

Oh Paul, why did you do that???

I was bored

Now I've got to post to correct some more (admittedly more slight) errors.

Corrections made - any better?

Chrismaths

Much better! :T