||EPS - Basic
||Market Cap (m)
Real-Time news about Bskyb (London Stock Exchange): 0 recent articles
|sicker: Name change not helped the share price :-(|
|pierre oreilly: I've just done the simple calcs to see the eps enhancement due to the many price-support share buybacks sky has recently made. Some seem to think lerss shares in issue translates into a high price change for a constant p/e.
Well the numbers are approx
Shares in issue around start of share price support buyback, early Nov 13, 1,591,799,334 at an approx price post the CL loss, about £8.10.
Shares in issue now, late Feb 14, 1,575,429,198 at an approx price about £9.40.
Shares boughtback approx 16,370,136.
That's about 1.03%, meaning a 1.03% price improvement due to fewer shares, which means the price at the same valuation is about £8.20, up from £8.10.
So that's the effect of fewer shares, an approx 10p price increase from £8.10 to £8.20.
The cost, assuming an average price of around £8.50, is about £139m. That's the cash sky has spent supporting the price, and driving it due to the mechanics of buying from £8.10 to £9.40, all other things being equal. The thing is, on a constant valuation basis, the price should be £8.20 - and probably less to reflect the £139m cash sky has just spent,and of course is now unavailable to meet the increasing content costs.
21st Century Fox (Murdochs vehicle) has dumped approx 6,400,000 shares in bsy raising Fox approx £54m during this buyback, - appreciate it if anyone could confirm these numbers which i believe are approximately correct.|
|pierre oreilly: Harv,
Yes, that's exactly what I said, which is exactly what the rns's say. Each time theres a buyback in the market (and the shares canceled) there's a corresponding sale from Fox )Murdoch's vehicle) such that fox maintains the same percentage of shares, therefore the same influnce. Brilliant, dumpoing shares while no dilution of influence. We are saying exaclty the same thing (which also the RNSs tell us) - don't get confused by any imbecile stating your posts are spot on and mine are cack when they say the same.
Regarding the share price when the price support stops. Yes, the number of shares in issue diminishes, so there's a p/e enhancement, so, all other things being equal, the price when the support stops, will drop to the previous valuation - i.e. the same p/e, which will be at a slightly higher price due to less shares in issue. The key thing is the magnitude of the p/e change due to the lowered number of shares, and to see that, you have to do a simple quantitative analysis (i.e. put the numbers in). The other key thing is to realise the mechanics of buying say £300ks worth of shares drives the price up - as do any other buys. The price the buys drive the price up to is higher than the price justified by the p/e on the lower number of shares, hence, when support stops, the price returns to the p/e appropriate for the business prospects. Try putting numbers in - nothing like quantitative analysis for predicting these mechanical/technical adjustments. You'll soon see how tiny the p/e enhancement is due to the lower number of shares. (A simple quantitative analysis is how I easly predicted the recent 3%ish rise over the last couple of days for BT, which equally applied to Sky, if you remember me saying that).|
We can certainly agree that Murdoch is a wily old fox who will shrewdly manipulate things to his advantage . That's why it would be very good news if the company could extract itself away from his influence but if and how that could be done is another thing and may just be wishful thinking .
Let's just for simplicity of arithmetic assume that the company has 10K shares in total of which Fox hold 4K giving them a 40% voting share.
Total BSY shares Buyback FOX Sale Other foxshares % fox holding
Start 10K 0 0 0 4K 40%
(2) 9K 1K 0.4K 0.6K 3.6K 40%
(3) 8K 1K 0.4K 0.6K 3.2K 40%
and so on .
Hence Fox can raise cash while maintaining their voting% but other shareholders also get the chance to offload .
Undoubtedly the buyback puts upward pressure on the share price and is costing the company more and more as the share price increases .
I don't quite follow your argument that the share price drifts back to the original when buyback stops. After all, at the end of the buyback program their will be fewer shares in circulation and much reduced free float of shares .
Technical arguments apart , this has been a great day for BSY and BT shareholders while I executed my little sales too early yesterday before this sudden rise .
Not quite sure how that relates to the VOD effect since index trackers would need to adjust all their FTSE positions .|
|pierre oreilly: Harv - regard point 3 - I can assure you I am perfectly correct in what I stated, it's all there in the daily RNSs, Murdoch, via his ownership vehicle in bsy, is selling in quantity most days.
I didn't suggest he was lowering his percentage of voting rights - in fact the RNSs tell us he is keeping exactly the same percentage voting rights - his shareholding is lowered in exactly the same percentage way as the daily and persistent price support buybacks Sky is spending hundreds of millions on (quite surprising given the much higher cash needs due to the rapidly increasing content prices they'll have to pay to stay in the game. (Has anyone at all here done the simply analysis to see how sky's available cash is diminishing due to supporting the share price?)
the structure under which Murdoch is dumping his bsy shares almost daily and in quantity really is a brilliant piece of business acumen (as you would expect from Murdoch - whatever else can be said, he has a brilliant business brain). He's dumping millions of shares, raising lots of cash, and keeping the same influential hold on sky and - to boot - has the excellent excuse for those sales that he has no option to sell due to past agreements. While that's true, it is the acumen and business insight to set up those agreements in the first place - really a touch of genius for those who can see it.
In all my years of investing, I have never beofre seen company buybacks on such a scale. Almost daily for months. The price support works fine until the price support and buybacks end, when the price will return roughly to the pre-buyback p/e, in the absence of any other factors. Contrary to those who rely on Wiki for their information on the effect of price support buybacks, the change in p/e due to the lower number of shares in issue is absolutely tiny (can anyone else also work it out for sky's buybacks?) and yet the price is boosted significantly by the mechanics of the buybacks through the market driving the p/e to a level not justified by the business - hence the inevitable price drop when the price support mechanism is reduced or ceased altogether, and the p/e returns to a level the business justifies. Buybacks on this scale simply give an exit point for shareholders at a much higher price than would otherwise be the case for a limited time.|
|harvester: Pierre :
(1) Yes, BT has more than twice the market cap of BSY . Share buyback impact should be viewed against that .
(2) Yes, BSY share buy-back program appears larger than BT's .
BSY announced buyback over one year of 238mill shares or £500mill to be viewed against total of 1.575bn shares . BT announced share buyback of 24 million shares in February/March 2014 to be viewed against total of 7.9 bn shares approx . Not strictly comparable since not yet known what buy-backs BT will run for the rest of the year .
(3) I wish you were right on your last point of Murdoch offloading. Many BSY shareholders would welcome that and it would enhance the reputation and attractions of BSY . However, under the BSY RNS dated 22.11.13 Fox Inc will deliver some shares for the buy-back but Fox will maintain its % of shareholding so that there is no change of voting rights . So they are not yet surrendering or reducing control.
4) BT shareholders have been richly rewarded this last year but BSY shareholders
have also had a good run with divi of 3.34 better than BT's 2.35 and rising share value, admittedly enhanced by the buy-back program
Todays appeal Court ruling appears to be a small points victory for BT but I wonder if that could also back-fire as BT acquires more sporting rights which clearly they are trying to achieve .|
|harvester: Pierre: Care to let us know your BT trading positions and when they were taken?
Albany: Care to let us know your Bsy trading positions and when they were taken?
BT certainly has had a brilliant run last two+ years but is far below its
year 2000 price level . Recently it seems to have run out of steam as far as the share price is concerned . May resume its upward path after taking a breather.
BSY has also had a good run in the last two years and appears stronger of late .
I have made good gains from both BT and BSY shares . BSY is a high beta share and gives better scope for short-term trading . BT may be a good share for your pension fund . Investors in both companies have made good gains . Prospects will be less rosy if the two companies start to compete heavily
over TV content rights .|
the £12 appears to be a speculative guess by an analyst or journalist predicting what a bidder might have to pay to tempt Murdoch to agree to a sale .
There could be other ways in which VOD could play that game.
They could acquire a minority interest in BSY which does not have to be declared until they hold 3% or thereabouts and a takeover bid is not mandatory until they hold 30% I think. Buying such minority stake would set the market on fire up when it is leaked to the market and drive the BSY share price up one way or another . It could also motivate AT & T to show its hand and would do no harm to the VOD share price.
I do not understand what certain posters here are trying to achieve by ramping BT and de-ramping BSY on the BSY board . Everybody on ADVFN knows their often repeated views on these companies and is unlikely to be influenced by them repeating the same arguments again and again .|
|bigbertie: Hargreaves Lansdown video on Tuesday was mooting a recovery in BSY share price, and speculating about a Vodafone / Sky link-up. I've just bought in so here's hoping.|
|sicker: With BT's Champions League contract win, I shall be watching BSY share price on Monday with a certain amount of trepidation. Will BT share price surge to the detriment of BSY share price?|
BSkyB share price data is direct from the London Stock Exchange