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France T Message Board

  • craig1227@sbcglobal.net craig1227 Feb 15, 2013 4:28 PM Flag

    Getting Ridiculous

    Ok, there is no reason for this drastic decline. Who the hell is manipulating this thing? There is something going on, no not with the company. Yes they are in a tough year, but I think traders/scammers/analysts or whoever is holding this done is probably betting on another dividend cut. I hope that is not the case.

    Yes Irish Bob we already know, it's a turd and going to $5, no need to post it a thousand times.

    Any intelligent answers out there?

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    • Some of the decline was due to a rehash of an old story and the posting of misleading negative reports. The company still expects to generate of more than 7 billion euros in operating incomes for 2013 and 2014, respectively. It also plans to reduce direct and indirect cost by about 500 euros or more. Iliad is not really a competitor of FTE, the companies have a roaming agreement in place which FTE expects to receive over 500 euros or so per year for six years or until 2018. They are in bed together.

      The Iliad current model also will not sustain itself in the long-term. The company leverages its landline business to its mobile phone business. This may work in the short run with help from FTE but it will fall apart when the company adds more mobile phone subscribers and cost. Sooner or later it will have to raise prices which will result in higher churn rates moving forward. More competition on the landline side and debt to finance capex will cause even more problems to its model.

      FTE also wrote down goodwill for 2012 related to it Poland investment and ROW of about 1.7 billion euros. It also had a depreciation expense of about 6.3 billion euros, these are non-cash book entries which did not impact cash flow. Most people will add them back into net income for a better picture of cash flow.

      The company is also restructuring its debt to take advantage of lower interest rates. It is plans to pay down debt to add more shareholder value.

      I think some of this recent decline is also related to put option activities. Someone has loaded up $10 strike price puts for a few months out and now they are trying to gain by rehashing and omitting details of old news.

      Last weeks price drop was basically unfounded. There was no reason for investors to sell at an 8 percent discount from the week before close price. The stock price had already reacted to the old news. Someone just started rehashing old reports while omitting certain positive information. edit

    • I think the decline since beginning of the year coincides with european weakness. Look at all the european stocks and many have lost 10 %...this is much in line with france telecom. The company sits as a part of the CAC 40....so you are playing France here in a big way if you in this stock. FTE has also incurred a lot of negative press over 3g/4g pricing and loss of market share. I dont understand all this talk about the dividend getting cut further. Management indicated they are committed to .80 euros for 13/14...normally paid twice a year in June and Sept. They are committed to 45% of free cash flow payout. They took actions on the dividend cut this past fall to also dedicate money to reducing debt. Its part of a larger plan they have for becoming profitable. As i look across the landscape of investing i like this stock for the cash it skims.....its overall price to earnings ratio (much of the competition has taken what they can for the medium term and its very cheap compared to much of teh s&P) ...the dividend getting paid out...and the fact that the european markets are at much lower levels than the USA...they WILL recover...Just like nobody said the S&P would come back from 700 !! Those markets are way too cheap compared to the rest of the world and over time you are in a big telecom player that has emerging opportunites and in a european economic enviroment that is absolutely horrible. This is cheap folks...hang in there...always darkest before the dawn.

      • 2 Replies to suttonchalet
      • Some of the decline was due to a rehash of an old story and the posting of misleading negative reports. The company still expects to of more than 7 billion euros for 2013 and 2014, respectively. It also plans to reduce direct and indirect labor cost by about 500 euros or more. Iliad is not really a competitor of FTE, the companies have a roaming agreement in place which FTE expect to receive over 500 euros or so per year for six years or until 2018. They are in bed together.

        The Iliad current model also will not sustain itself in the long-term. The company leverages its landline business to its mobile phone business. This may work in the short run with help from FTE but it will fall apart when the company adds more mobile phone subscribers and cost. Sooner or later it will have to raise prices which will result in higher churn rates moving forward. More competition on the landline side and debt to finance capex will cause even more problems to its model.

        The company also wrote down goodwill for 2012 related to it Poland investment and ROW of about 1.7 billion euros. It also had a depreciation expense of about 6.3 euros, these are non-cash which did not impact cash flow. Most people will add them back into net income for a better picture of cash flow.

        The company is also restructuring its debt to take advantage of lower interest rate. It is plans to pay down debt to add more shareholder value.

        I think some of this recent decline is also related to put option activities. Someone has load up for a few months out and now they are trying to gain by rehashing and omitting details of old news.

      • I agree. And I like the exposure they have to the African emerging markets as well.

    • bassace39@gmail.com bassace39 Feb 15, 2013 4:54 PM Flag

      Intelligence and stocks don't go together, whether manipulation, panic selling or investors losing patience the price will be what it will be. If the fundamentals are there(which I believe are strong with FTE) then in time it will rise to more fair valuation. Some years ago I bought Canadian telcom Telus(T) at $10, next day dropped to $5 for no good reason where I bought more, When it got back to $7.50 I sold getting out even and then watched it climb to $40 three months later and is now in the $70 range. Timing the market is not easy and again I repeat if you have done your research and are patient, you stand a good chance of being rewarded.Hang in there long suffering FTE longs.

      Sentiment: Strong Buy

 

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