Jan 19 (Reuters) - India's Supreme Court will issue a verdict on Friday on Vodafone's appeal challenging a $2.2 billion tax bill over its acquisition of mobile assets in the country, the court's website showed, in a case keenly watched by foreign investors in Asia's third-largest economy.
Vodafone, fighting the tax bill in India over its 2007 purchase of Hutchison Whampoa Ltd's Indian mobile business, had appealed to the Supreme Court challenging a lower court order that Indian tax authorities had jurisdiction over tax bills in cross-border deals.
and here we are right back where VOD was before the news came out. We'll probably see a $26 handle shortly. I'm long VOD in a tax deferred account, but no where near my full exposure, waiting for a better price to add more.
I may buy some VOD lower in a taxable account and write calls against. Need to get the energy up to run the option analysis program.
Got a friend in at $25. Paid $25.01 myself. I focus on buying at a good price. In the mean time Goldman Sachs raised their target price to $31 from $27.20. So, still meets my 15% total return for entry into an individual stock. Also meets my buy price criteria at current prices. I still think we'll see this pop reverse in a few weeks, then I might buy more.
No tax due. Ruling was in VOD's favor. Paves the way for a listing in VOD India and expansion in India. VOD gets their deposit back plus 4% interest. Frees up foreign investment in India for more international companies.
What are Possibilities? Only one i believe is as sure as it gets for vod not to win outright. But there are many shades between winning and losing. I leave for other people to ponder it. For myself i am going for the ride at least till vz buy it or vod buys vz. the present relationship between vod and vz cannot last for too long, even thugh it can last for many years still. Mobility and information is in infancy and the future is bright for vod and rest is just background noise.
VOD has already set aside the money so if they lose and it is less then the set aside (most likely scenario), they win as they will be able to pocket the difference
VOD loses and has to pay more then they set aside (unlikely, but I'll throw it out there) 5% prob
VOD loses exactly what was set aside (no impact on stock) 25% prob
VOD loses but less then set aside (most likely and stock moves up) 50% prob
VOD wins (unlikely, but possible and stock moves up a lot) 5% prob
Decision delayed again - 15% prob
Definitely a level-headed way to view it and agree, there's a lot of possibles in between 'win' & 'lose'.
Short term, the market is nervous, hence the down days w/large volume, IMHO. We'll see tomorrow how it turns out but the result will hit the stock either way.
VOD & VZ merger makes sense, though you'll need VZ to spin off its' wire-line biz ... this still could take years, like you say.
What matters now is VOD emerging from the India tax case as favorably as possible.