Cable & Wireless Share Discussion Threads

[the stinger] 06/5/2012 09:51

Boix - you may have sold out to soon....then again...you may not have...

[boix] 06/5/2012 09:41

IG and spreadex won't take guaranteed stops on cw.
Too much risk.

[djwr100] 05/5/2012 19:30

ok, thanks

[7kiwi] 05/5/2012 19:27

dj,

YOu can open mirroring spreadbet positions. Say long at 33p with a stop loss at 31p and short at 33p with a stop loss at 35p. Then if the share price moves out of the 31-35p boundaqry, you make money either way.

[boix] 05/5/2012 18:37

Nothing is agreed just a FINAL offer at 38p and requires 75% of shareholders to agree.
That's why its going down when around 20% have already said NO.
Simple
See you in the teens

[careful] 05/5/2012 16:38

rms
you are puzzled that institutional shareholders do not buy CW. at this price.
it is probably that they have huge holdings in Vod. and would like them to take out CW. at 38p.

[rogermauricesmith] 05/5/2012 16:34

djwr100
The suggestion there is that they are being asked by Vodafone and paid by Vodafone to manipulate the share price. Now that is certainly illegal.
What they are probably doing is selling and buying back the same day presumably at a very low overall cost that they are prepared to fund out of their fee. Now that is a very grey area indeed.
There is of course a big danger of being caught out if the price was to unexpectedly spike upwards in the middle of the day before they could buy back.
UBS must have taken a calculated judgement that they can get away with it and stay on the right side of the law.
Personally I think they have stepped over the line this week.

[djwr100] 05/5/2012 15:21

Ok, everyone's short selling. And clearly, since the shares are going for 38p+, in a while, they will all take a bath on these deals.

That's really good of them, to do this, and pay an arm and a leg in losses and costs.

[rogermauricesmith] 05/5/2012 14:50

Stinger
Yes agree - Vodafone and UBS have played it very well so far.
With no competing bids their game plan has been impeccable. But let's see how they play if there is another bid.
That could be very tricky. Personally I think if that happened Vodafone would bid again and perhaps again after that. And for the actual strategic value of the prize and what it delivers to Vodafone, the sums being talked about really are very small. Indeed it could bid £1.7 billion and still enjoy £1.2 billion tax benefits and sell off the overseas cables for £500 million and effectively pay nothing for the UK business which is what it appears to want.

[the stinger] 05/5/2012 14:40

Vod will offer a sweetener to secure ORBIS's nod. 42-44p final offer. 38p was to flush out any other offers,,we all know CWW is worth a little more and those bailing out last week have been scared off too early.

Its all tactics...and I must say that VOD have played it great from the start.

[rogermauricesmith] 05/5/2012 13:28

Deutsche
And that adds to the mystery of why the share price has been falling amidst stake building. It's a no-brainer to buy now and sell at 38p in three or even six months time for any institution. At current prices in three months time there is a 70% annual equivalent interest rate and six months 35% on money invested in the shares.
The risk is minimal as we (mostly) all agree Vodafone is not going to walk away from this and all that is required is patience. And there is a very good chance of a sweetener from Vodafone (I see the Orbis sabre-rattling as a positive not a negative for the shares) and a reasonable chance of a counter bid - so what is there not to like?
So with a 35% return over six months and the bonuses that are maybe on offer, every institution should be buying at these prices.
I just can't see why the shares have been going down this week when it has been so hard to buy them. The only explanation can be the short selling that has been going on.
And it can't be just UBS. It must have co-conspirators as it is able to neatly balance up its sells and buys at the end of each day.
Or does anybody have any other ideas why this is happening?

[djwr100] 05/5/2012 13:28

So, if I buy 1 million shares and sell I million shares, but first call it a straddle position, does that make it profitable?

How can I do this?

[7kiwi] 05/5/2012 13:02

Or they may be holding positions on behalf of clients.

[7kiwi] 05/5/2012 13:02

It may, overall be a straddle position.

[djwr100] 05/5/2012 11:24

Those that understand more than me seem to know why selling shares and buying the same have value to the punter. I can't see how having a short position and and equal long one makes any sense. Don't things cancel out, to leave costs, alone. Aren't costs a bad thing?

[franklan] 05/5/2012 11:12

I'm surprised that no-one commented on the Deutsche purchases earlier. If I read it correctly, they have upped their stake from 97 million shares to 130 million. Not an insignificant holding.

Am I reading it correctly ?

[impecunious] 05/5/2012 10:22

Am I right in thinking that the reason no timescales for the takeover have been given by anyone is because, being via a Scheme of Arrangement:
- CW need the court's approval to convene the meeting/vote by shareholders;
- having held the vote (and subject first to achieving 75%+ in favour), CW have to go back to court and get the result sanctioned?

If so, is this likely to take another couple of months ... or perhaps longer?
(Based on their recent record, presumably we can expect to hear nothing from the CW board in the meantime.)

[7kiwi] 05/5/2012 09:57

RMS,

Is is clear that UBS is trading the stock. But their net position doesn't change much in any particular day. Not sure what they are up to, but Jeffs and others seem to be doing a similar thing.

However, keep an eye on other players like LBG, which unloaded a net 1.4m shares; Blackrock selling ~330K shares; Socgen seems to have unloaded several million to give themselves some sort of straddle position with large open long positions and large open short positions; Cheyne that has decreased its long position by tens of millions of shares (links below):







These net sells will have had a far bigger impact on the sp, than trades from those who broadly keep a balanced position over the course of the day. I would also note, that a lot of trading is not not happening on the LSE, because simply the trades of those four links I put up far exceed the total volume reported on ADVFN.


Interestingly, Deutsche seems to be buying:

[plastow] 05/5/2012 09:06

sold out at 37.2 and then back in on this drift in the sp
the footprint which cw has is a must for vod im holding and i will top up on any more weakness .
i myself can,t just see vod walking,,

just back from the med ,liberty of the seas f,ing massive!!

[rogermauricesmith] 05/5/2012 02:52

djwr100

It appears that these shares are being sold strategically to keep the CW share price down. And very effectively too. Shares are then repurchased in the same period in a way that won't drive the price up.
Certainly CW's share price has been manipulated downwards in the two weeks since the bid. Normally such takeover targets trade at a 1 or 2% premium on the basis of speculation of a higher bid or a sweetening of terms. CW is trading at a near 20% discount to a cash offer from a blue chip bidder. It's almost unprecedented and scarcely believable.

[djwr100] 04/5/2012 17:16

Why should a client be impressed with what is effectively a zero sum transaction, simply incurring costs to do nothing?

And how can it affect the market?

[rogermauricesmith] 04/5/2012 16:45

Brian
Like you I am finding it so difficult to actually buy CW any time I want to. That seems incompatible with a falling share price.
Theoretically this is now a copper bottomed share but it is still acting anything but. Someone is selling very skillfully into every buy order.

For instance yesterday UBS sold 43.35 million shares short and bought back 43.3 million shares. There is no logical reason for UBS's London office to be doing this every day since the bid. UBS is working very hard to impress its client.

To me Vodafone needs this asset to make it into the top tier in the UK. The price it pays to achieve that is almost inconsequential in the context of the rewards.

[nilla159] 04/5/2012 13:36

Hi RMS, by "fishy" I mean at the moment we are being played around with by the big boys, we don't know what's going on we can only guess.I am guessing that VOD want CW. and are trying to keep the price low to corral holders into a nervous state so that they will accept the offer of a lowly 38p.

I also think this is a good play on the market turning south or the old chesnut "sell in may and go away", if the markets dip badly then everybody will be pleased to take the 38p on offer.

After all is said and done what will VOD do with the £1 billion if they were to walk away and allow someone else to jump ahead of them and become No2 behind BT.
They can of course continue to buy back another £1 billion of their own shares (where will that land them?)I always think share buy backs are the biggest waste of shareholders money possible - apart from excessive boardroom pay which seems to have gotten CW.into this mess in the first instance.

I still think there is more to come from VOD or hopefully others.

Thank you Roger for all of your first rate and intelligent posts so far.Brian

This could end up blue today for the first time in quite a while, hopefully we will see a counter bid Tues! Here's hoping.

[dickbush] 04/5/2012 13:03

Assuming the net debt is written off entirely, that leaves them bidding 3 times EBITDA - for a company in bankruptcy..

Presumably the banks get 2/3rds of their money back and the equity holders get nothing.

[sajad37] 04/5/2012 12:28

when will vodaphone complete the C&w takeover?? does anyone have the exact date.

Thank you in advance for your help