All the strange movements on Tim on the stock market
What's happening to Tim stock on the stock market. Facts, numbers, hypotheses and insights
Tim on the stock market rollercoaster.
Following the extraordinary board meeting and the addition to the press release on the industrial plan, Tim had opened the day on a positive note on Piazza Affari (+3.4% at 0.2295 euros), predicting a rebound after last Thursday's disastrous fall, when the stock lost almost 24%. The market has shown concern regarding the new "Free tu run" plan for 2026 presented by Tim's CEO Pietro Labriola on the occasion of Capital market Day 2024.
But the rise did not last long: at 11 am, Tim's shares plummeted, falling by more than 9% to 0.2 euros, to the lowest levels of the last 15 months. At 3.45pm the stock dropped 4.6% to 0.21 euros for a market capitalization of around 4.6 billion euros.
All the details.
START OF THE WEEK ON A ROLLER COASTER FOR TIM ON THE STOCK STOCK
This morning the stock opened with a 3.15% surge to 0.229 euros, returning to the levels of March 6 (0.228 euros) before the post-plan slide. An effect which, however, deflates just over an hour after the start of trading with the stock falling back to the bottom of the list (-7.7%) at 0.2 euros, only to end up being suspended downwards, with a red first of 5% and then above 7%.
At the end of the morning, approximately 840 million Telecom Italia shares changed hands, equal to approximately 5.4% of the share capital, Radiocor reports. Today, after the integration of some numbers on the 2024-2026 plan, concerning in particular debt and cash flow, Tim shares lost 9%. In the early afternoon the losses were almost halved and it is currently down 4.6% with the stock going back to 0.21 euros.
EXTRAORDINARY BOARD
After the company's shares collapsed by 24% on the Milan Stock Exchange on March 7 following the unanimous approval of the 2024-2026 "Free to Run" industrial plan, the company called an extraordinary meeting of the board of directors on Friday March 8 .
Yesterday Tim's board of directors met to take stock of the reasons for the collapse of the shares (the strongest daily drop ever recorded) which, according to what the top management explained, is not linked to the plan.
INTEGRATION TO THE PLAN
With the integration, the company led by Pietro Labriola has put in black and white that the pro-forma net debt, net of the deleverage estimated for the Netco operation (around 6.1 billion at the end of 2023), is expected at the end of 2024 equal to approximately 7.5 billion. This change is mainly attributable to: ordinary management, i.e. the Ebitda net of investments, financial charges, the performance of the Net Working Capital (Nwc), the minorities of Tim Brasil and the tax and other charges component; extraordinary management, or impacts connected to the Netco operation such as separation costs, any impacts from price adjustment and further items relating to Net working Capital, explains the group note.
As for the 2025-2026 cash flows, Tim specifies that the net cash flow in 2026 is expected to be around 0.5 billion euros, indicating a normalized value of 800 million net of extraordinary components. The company confirmed the guidance over the plan period, illustrated to the market, specifying that "any upside could derive from the earn-outs connected to the Netco operation and the possible sale of Sparkle, the process of which is still underway".
ANALYSTS COMMENT
For Equita analysts, the decision to give full transparency to the cash flow plan hypotheses "is more than appropriate given the confusion created with last Thursday's Capital Market Day". “At yesterday's prices – observes the broker – the market in fact values the investment in Tim Brazil alone more than the entire Tim, with an implicit negative valuation of over 1 billion euros on the domestic business”. This is "a scenario that in our opinion makes little sense given the solid financial structure of the group after the sale of NetCo (twice the EBITDA debt ratio)". Furthermore, the valuation "does not incorporate the possible upsides from the earn-outs (up to a maximum of 2.9 billion) while the potential sale of Sparkle would not have negative impacts on the cash flow of the domestic business". Equita therefore confirms the price assessment at 0.35 euros.
Along the same lines, Intermonte believes the board's decision to clarify the debt issue is "coherent". The broker also sees a possible "significant improvement" on cash flow items, given the collection of the earnouts and the sale of Sparkle, which "overall represent an upside of approximately 80% of Tim's current market cap" .
FOR MANAGEMENT THE PLAN IS NOT RESPONSIBLE FOR THE COLLAPSE OF THE STOCK
So, as already mentioned, at yesterday's board of directors the CEO Labriola and Tim's management declared that the plan could not be considered responsible for the collapse and could go ahead.
The company has received government support for the 22 billion euro sale of its NetCo landline to American fund KKR as part of Pietro Labriola's strategy to reduce debt by 14 billion.
VIVENDI CLEARS THE LOSS RELATED TO THE SHARE IN THE FORMER TELECOM ITALIA
In the meantime, again on March 7, Vivendi eliminated the loss due to its stake in Tim with a capital gain of 510 billion realized in 2023. This is what emerged from the accounts of the French giant which recalled that it had written down its stake in Tim by 1. 34 billion in 2022.
The French media conglomerate, owned by the Bolloré family, holds a 23.75% stake and more than 17% of Telecom Italia's voting rights. The company led by Arnaud de Puyfontaine is contesting in court the sale of the fixed network to the US fund KKR, an operation worth up to 22 billion euros, claiming that the sale changes the corporate purpose and statute of Tim. In mid-December the French partner in fact presented an appeal to the Court of Milan against the company led by Pietro Labriola, without however requesting the emergency suspension of the network transfer operation. The closing of the transaction is expected this summer.
As for the net loss of 393 million resulting from this stake, the French group explained that it was canceled out last year, together with a 300 million write-down of Editis, by a financial capital gain of 515 million linked to the stake in Banijay Group Holding.
HYPOTHESES AND SCENARIOS
Observers noted this reiterated communication and also wondered why. But the reasons are unknown and difficult to hypothesize. Does it implicitly mean that the French group is ataractic about the sudden drop in the stock in recent days?
Or are there hypotheses – even outside Vivendi – about maneuvers preparatory to a takeover bid that now aim to sink the stock? Or are there attempts underway to cripple the board of directors' list for the renewal of the board?
All unanswered questions.
And which are not confirmed on the market.
In fact today the Corriere della sera writes: “From the first evidence from Consob – checks are still in progress – it emerged that the wave of sales on the market – in two sessions almost 23% of the capital was exchanged – would have been caused by a "panic selling" and by the automatic orders that trading algorithms trigger when the price of a share falls below a certain threshold, plus a component referable to investment and institutional funds".
In short, no French hand in action.
CONSOB FOCUS ON TIM STOCK ON THE STOCK EXCHANGE
Furthermore, Consob monitoring of Tim shares also began last Thursday. During Tim's so-called 'Black Thursday', after the presentation of the new 'Free to run' plan to the market, the stock had lost almost 24% and around 13% of the capital had changed hands.
Therefore, the authority that supervises the financial markets is carefully monitoring stock market trading, characterized by exceptionally high volumes and very strong tensions, Ansa reported on Friday. Under the lens of the offices, according to the first Italian press agency, there is both the analysis of the performance of the stock in relation to the information flow, to verify its coherence, and the operations on the shares, with the aim of understanding, through the analysis of the concentration of trade, whether "strong hands" are in action on the telephone group.
THE POSITION OF THE CEO LABRIOLA
Finally, Pietro Labriola, CEO of Tim, spoke of "anomalous exchanges" during the conference call with journalists on the plan last Thursday. Labriola also underlined that “Today our bonds have grown in value. The bond market therefore sees a story of company debt levels being much more under control than in the past. Why, he asked, does the stock market not see things the same way? given the fall of Tim shares on the stock market.
LABRIOLA PURCHASES
Meanwhile Labriola, CEO of Tim, purchased 500,000 shares at a price of 0.2036 euros per share. A sign of confidence from the CEO after the presentation of the first industrial plan without the network.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tim-borsa/ on Mon, 11 Mar 2024 15:18:55 +0000.