Vodafone shares bounce on sale of Italian business
Vodafone has agreed to sell its Italian operations to Swisscom for €8bn in cash and return €4bn to shareholders through buybacks.
It’s seen share in Vodafone jump at the start of the session on hopes that the move, as part of chief executive Margherita Della Valle’s plans to simplify the UK-based telecoms group, will begin to re-focus the group back on its UK business. The only negative effect on from the share buyback programme is that Vodafone says it will cut its dividend to 4.5 cents a share from next year, down from 9 cents in the year to March 2023.
(AI Video Summary)
Vodafone
Vodafone, a global telecommunications company, has made a big agreement with Swisscom. In this deal, Vodafone will sell its Italian branch for a whopping 8 billion euros and combine it with Swisscom's Italian subsidiary, Fastweb. This exciting news has caused the price of Vodafone's shares to go up. The transaction is set to be finished in early 2025 and will result in the creation of the second-largest fixed-line broadband operator in Italy, owned by Swisscom.
As part of the announcement, Vodafone also plans to give 4 billion euros back to its shareholders through buying back shares. This means that the company will repurchase some of its own shares from investors and give them money in return. This move has caused the price of Vodafone shares to rise even more. In the past, Vodafone's shareholders have experienced a significant decline in the value of their shares, but this recent development is a positive sign for them.
Vodafone's share price
If we look at the technical analysis of Vodafone's share price, we can see that it has reached a good level of support at around 61.8%. This means that the share price is not likely to go lower than this point in the near future. However, it's hard to say how much the share price will increase in the long term. To play it safe, investors who want to invest in Vodafone should set a stop loss level below 64 pence. This means that if the share price goes below that level, they should sell their shares to minimize their losses.
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