From VOD site:
"Eligible shareholders are therefore expected to receive 0.026 Verizon common shares for each Vodafone ordinary share under the Return of Value."
Should say 0.26!
"Vodafone confirms that the total cash amount to be returned to shareholders pursuant to the Return of Value will be US$23.886 billion, equivalent to US$0.49 for each existing ordinary share. As noted in the announcement on 19 February 2014, this will be in addition to the distribution of Verizon common shares to eligible shareholders."
Should say $4.90!
So 1000 shares of VOD will become approximately:
545 shares VOD + 260 shares VZ + $4900
Stock is undervalued and it makes sense for company to buy back its shares at this low price. I wonder how many shareholders will tender their shares though. Also not a good sign that chairman Jilot is tendering some or all his shares. CEO not tendering encouraging.
Share buybacks are only good if the stock is undervalued. ELON is overvalued right now. A significant share buyback is a dream
Share buyback? ELON had 40 million shares outstanding 10 years ago. Today it has 43 million. Their stock price is overvalued now so a share buyback would destroy value for long term holders and would solve none of their fundamental problems. I doubt management would spend money to buyback its own shares. They will use the money to continue overpaying themselves instead.
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Here's a post I wrote on March 7, 2009 on Yahoo for ELON:
"As a value investor, I don't know how to value this company with negative earnings. I also admittedly know nothing about their business. I am skeptical of promises of future riches. BUT looking at their balance sheet, ELON is a buy if it drops to below $2. Their current assets minus their TOTAL liabilities is more than 2 bucks a share. As you know I have been bearish on ELON, but if the price drops to under 2 dollars I might consider buying some..."
I have not followed ELON for years. At that time the stock was about $6.72. While the Dow has more than doubled since then, ELON has lost another 70% of its value. Now is it still a bargain at $2? Sad to say that in the past 5 years alone, management has destroyed so much value that even at $2 it is not a bargain. Management shamelessly has granted itself stock options which has caused dilution. Debt has gone up. The company has now consistently lost money for 8 years. This company is should be liquidated or sold before it goes to zero.