Vodafone Verizon sell off 'cash bonanza' or not ...

moonshine_jack

Talking about the Vodafone sale of Verizon and the so-called 'cash bonanza' paid to VF shareholders.

Well, I am one and it isn't.

If you held (say) 3300 Vodafone shares shares (at 245p), these were worth £8085 before the sale.

Once the share issue happened, you get about £990 in cash and 86 Verizon shares. If you sell these, that generates about £2400, making £3490 in total.

However, Vodafone shares were also swapped in a '6 for 11' deal, so your 3300 shares become 1800 (ie now worth £4410, assuming 245p per share).

Total value of cash and shares now is therefore £4410+£3490 = £7900

£7900 is less than £8085.

So VF shareholders just have more cash and fewer shares and (crucially) are actually slightly worse off than before.

So where did all the money go from the sell off go?

ffacoffipawb

moonshine_jack wrote: »

Talking about the Vodafone sale of Verizon and the so-called 'cash bonanza' paid to VF shareholders.

Well, I am one and it isn't.

If you held (say) 3300 Vodafone shares shares (at 245p), these were worth £8085 before the sale.

Once the share issue happened, you get about £990 in cash and 86 Verizon shares. If you sell these, that generates about £2400, making £3490 in total.

However, Vodafone shares were also swapped in a '6 for 11' deal, so your 3300 shares become 1800 (ie now worth £4410, assuming 245p per share).

Total value of cash and shares now is therefore £4410+£3490 = £7900

£7900 is less than £8085.

So VF shareholders just have more cash and fewer shares and (crucially) are actually slightly worse off than before.

So where did all the money go from the sell off go?

I reckon the waiter pocketed it.

lvader

The share price already had the deal priced in, that is why I sold before it was concluded.

westy22

moonshine_jack wrote: »

Talking about the Vodafone sale of Verizon and the so-called 'cash bonanza' paid to VF shareholders.

Well, I am one and it isn't.

If you held (say) 3300 Vodafone shares shares (at 245p), these were worth £8085 before the sale.

Once the share issue happened, you get about £990 in cash and 86 Verizon shares. If you sell these, that generates about £2400, making £3490 in total.

However, Vodafone shares were also swapped in a '6 for 11' deal, so your 3300 shares become 1800 (ie now worth £4410, assuming 245p per share).

Total value of cash and shares now is therefore £4410+£3490 = £7900

£7900 is less than £8085.

So VF shareholders just have more cash and fewer shares and (crucially) are actually slightly worse off than before.

So where did all the money go from the sell off go?

We have known all this for 4 months or more - you were never going to make anything but a small loss or a break-even at best.

jimjames

When did you buy your shares?

All that has happened is some of the value of the shares has been given back to you as they sold off part of the company. You still own part of Vodafone but the whole is now smaller so your portion is too.

Thrugelmir

moonshine_jack wrote: »

Talking about the Vodafone sale of Verizon and the so-called 'cash bonanza' paid to VF shareholders.

Well, I am one and it isn't.

My average buying price for Vodafone was 155p.

That's a bonanza.

lvader

westy22 wrote: »

We have known all this for 4 months or more - you were never going to make anything but a small loss or a break-even at best.

Not quite, I took some time to work out what the true value was. The price increased quite a bit in those 4 months.

Jogle

You seem to think you have lost about £185 but I think there is an error in your calculations:

moonshine_jack wrote: »

If you held (say) 3300 Vodafone shares shares (at 245p), these were worth £8085 before the sale.

As far as I'm aware, the share price at close on 21 February 2014 wasn't 245p but less than 240p. I've looked it up and I think it was about 237p (it's confused as the prices quoted are now not the actual price, but one adjusted for the 6:11 split).

If the price was 237p, you're actually up £79

planteria

Thrugelmir wrote: »

My average buying price for Vodafone was 155p.

that is the key. and Ivader makes a valid point. i have:

£3903 Vodafone shares
£2184 Verizon shares
£859 Cash

for a £5,000 purchase of Vodafone shares. whether you sold prior to the deal, or held on to let it pay out, as long as you bought in well before the deal was announced, you shared in a 'bonanza' of sorts:D.

le_loup

Same point ...(same person?) made in Sunday Times letters this week. Obviously they (he/she) know very little about share prices.

Mirno

If you held some shares for say £1 each and then the company announced they would buy them off you for £100 per share in two months time - how much would you sell them to me for now?

Mirno