Tuesday, 24 September 2013

Vodafone


Following the recent deal Vodafone struck with Verizon Wireless to sell their stake in the company, I am left wondering if I still want to hold their shares.

Verizon is a fantastic business and was one of the biggest reasons for holding Vodafone in the first instance. They will definitely be a far smaller and weaker company as a result of the sale.

Their plan is to reinvest some of the sale proceeds but return the lion's share back to shareholders via a special dividend.

There is a chance that the smaller resulting company might be a target for a merger/takeover, which could provide a boost to the share price but relying on this would be a bit of a gamble.

Last week two of Vodafone's directors (Andy Halford & Stephen Pusey) sold £4m worth of shares between them, there could be many reasons for the sale but I'm guessing they aren't expecting the recent events to bode well for the share price otherwise they might have held out for longer. With this in mind I may offload these shares in the near future.



 


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