Rate my SIPP - ITV high conviction

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82024091#Comment_82024091

The Nasdaq accommodation in favour of SpaceX is indicative ( to me) of a wider propensity for this current political administration to encourage abandoning accepted and established rules based systems in its dealings with the world at large, in furtherance of an America first narrative.

That the S & P 500 has withstood this pressure seems laudable at this point, if only because in view of its outsized influence on the wider indices this would be disastrous for the integrity and transparency of investing in American stocks. However, one can genuinely ask how long will the S &P continue to retain its integrity and withstand political tinkering?

Cobbler_tone

https://forums.moneysavingexpert.com/discussion/comment/82023526#Comment_82023526

Nice little bonus coming your way. 😉 Fortune sometimes favours the brave.

Juno_Moneta

Thanks Cobbler - yes the RNS today is the one ITV holders have been waiting for.
https://www.itvplc.com/investors/regulatory-news?news=sale-of-itv-me-business-to-sky–2073064

However judging by the muted market reaction today - I think it’s going to take some time before analysts update their sum of the parts valuations, regulatory approval risk remains, and of course it’s going to be a year plus before my pension probably benefits fully from the deal.

But as always I will just keep holding and see how my SIPP can grow - plus the stated 25p shareholder ‘cash return’ would be £300,000+ if it’s a special dividend (and usefully tax free inside SIPP) - unless they decide to do a buyback instead.

I’d be very happy with this as a special dividend as it would more than cover the max possible SIPP TFLS in one go! Time will tell…

kempiejon

@Juno_Moneta Do you think the market is still mispricing these then and analysts will update and there's more, what do you think >10% to come still? A special would be nice, the majority of my ITV holdings predate the 60-85p range of the past 4 odd years though I did get some at around 70p. Any takeover sub £1.20 would crystallise a loss. It was a good income share back in the day until it stumbled around 2019, I have held for the hoped for value of the parts to be realised and they do bung me divi. Might be time to reassess now and look at other opportunities, my thoughts are it's usually in the price and this announcement and lack of major uplift adds to that view.

As you say it'll be a while to unwind yet.

Juno_Moneta

KJ - I think the real Studios standalone value has yet to be reflected (based on peers), and today’s announcement is the first step towards that goal.

kempiejon

Juno, Yeah, I first heard that story a few years back having held after income and capital falls but don't have your current conviction. If this first step hasn't bumped the sp and the analysts and the market price ITV worth around 80p I could concede I don't know any better. A deal like this I thought could have had a bigger effect. 25p special would be nice.

QrizB

I see ITV is down 7% today. From reading this thread, that surprises me.

Juno_Moneta

Well … this isn't really the forum to discuss daily share price changes (and only down days seem to generate comments which is a bit one sided!) but anyway it’s not a huge surprise given there is now a 12 month wait for the deal to conclude, making this an ideal short for now (that will have to be closed by buying back closer to deal completion - assuming approved) plus grumbling from some analysts today about the deal being better for Sky than ITV.

However my SIPP is a long term investment, so as I’ve said before will continue holding (and still reinvesting dividends!).

If there’s anything usefully pension related to share in the next 12 months I’ll update ;)

Bravepants

Any Special Dividend will reduce the share price though right? It's not extra money on top. Otherwise carpet baggers will have a field day!😉

Secret2ndAccount

Not to the extent that it's a surprise. Imagine a share which always hovered around a constant value, and paid out a £1 dividend every year. If they suddenly and surprisingly announced a one-off extra payout of £1, the share price would quickly jump by £1, then fall by £1 after the ex-dividend date. You are still £1 better off.

So, if the special dividend is expected, it's all built in to the current price. To the extent that it's a surprise, it will benefit existing shareholders.