What happens to Tim stock on the stock market. Consob investigates
Tim rises on the stock market after yesterday's plunge, while analysts redo the calculations on the plan to 2026 without NetCo. And Consob opens a spotlight on the movements of the stock on Piazza Affari. Here are the latest news
Tim shares are attempting to rise on the stock market after yesterday's panic selling.
The Italian telecommunications operator returns to rise today on Piazza Affari (+3.26% to 0.22 euros at 3 pm) after the free fall of the shares recorded yesterday with closing at -23.8% (0.21 euros per share ) on the day of the presentation of the “Free tu run” plan for 2026 presented by Tim's CEO Pietro Labriola on the occasion of Capital market Day 2024. That is, the first industrial plan without the network.
The next board of the telecommunications company without any representative of the major shareholder, Vivendi, is seen on the market as the continuation of a dead-end legal and corporate dispute and analysts were surprised by the lack of tendency of the plan to reduce debt despite the sale of the network, asking for greater clarity on the estimates.
Yesterday, meanwhile, after the stock's plunge, CEO Pietro Labriola explained that the company will evaluate and analyze the situation "also to understand the anomalous volumes: I can understand some aspects not understood, but we have always said that the deleverage is below the 2".
In addition to the impact of the stock's fall on the stock exchange day, the number of shares changing hands on the market was also surprising: over two and a half billion, approximately 13% of the capital, and 12 times higher than the daily average. Consob's monitoring of the Tim stock is underway precisely on the enormous mass of shares that moved yesterday.
All that remains is to wait until next April 23rd: the current management will have to provide clarifications in view of the assembly that will vote for the renewal of the board of directors.
All the details.
WHICH HAPPENED TO THE TIM STOCK ON THE STOCK EXCHANGE YESTERDAY
After the presentation of the new industrial plan to 2026, Tim collapsed on the stock market, burning over 1.3 billion in capitalisation. Record volumes were traded, amounting to over 2 billion pieces (13% of the capital)
Today the shares are trying to rebound and have been moving up since the first trading, currently at +3% (around 0.22 euros).
THE NUMBERS ON THE DEBT DO NOT RETURN
A series of elements have unleashed the storm on shares, starting from a starting point of the level of debt, which at the end of 2024 is expected to be 7.6 billion, i.e. 1 billion more than the 6.6 expected.
Because if the company will collect 14.2 billion from the sale of the network to KKR, analysts expected that the debt at the end of 2024 would fall to 6.5 billion from 20.3 billion at the end of 2023.
EQUITY ANALYSTS DO THE ACCOUNTS AGAIN
As Ansa reports today, analysts have had the answers they were looking for on the deleverage plan and path and are thinking more coldly by redoing the accounts, the market was expecting a more substantial debt cut and some, Equita for example, are reducing the target price at 0.35 euros. The negative element "is linked to the financial charges which remain high in the plan also in 2026 (we estimate 700 million) due to the complexity of optimizing the new capital structure (and we think for a certain prudence)". Some doubts, even if it is not considered impossible, are expressed on the growth profile of the domestic Ebitda: "rather aggressive in our opinion, even if very linked to cost control and growth of Enterprise, and on capex in slight growth and which can offer flexibility to ensure the achievement of the EBITDA-capex target".
The analysts also recognize some positive elements: "the higher domestic Ebitda in 2024 (1.9 billion compared to their calculations which led them to consider 1.7 billion, ed.) partly compensates for the higher debt" and "as much as the cash generation to 2026 is lower than expected, the new capital structure of the group is much more solid than in the past and therefore today the issue on the stock is purely evaluation and not the stability of the financial structure".
We had the opportunity to clarify the essential elements of the 'bridge' (the steps, ed.) on debt and cash flow – explains an Equita analyst – The debt is expected to go from 20.3 billion at the end of 2023 to 7.6 billion at end of 2024, compared to the 6.6 billion we expected, with 1.5 billion of cash absorption resulting from the following passage: 1.6 billion of ebitda-capex, -1.5 billion between financial charges and taxes, -0.9 billion between return of NetCo working capital and price adjustment, -0.5 billion in extraordinary net working capital (Dazn, early retirements), -0.2 billion in Brazilian dividends”. In 2025 the expected debt reduction is modest and in 2026 it will be more significant (0.5/0.6 billion expected). “This corresponds to approximately 900 million in pre-dividend cash flow versus the 1.1 billion” that analysts had calculated.
THE DEVALUATION OF VIVENDI
Meanwhile, yesterday Vivendi, the group's main shareholder, wrote down its stake in Tim by 1.347 billion euros. The French group announced this in a note, recalling that Tim closed 2022 with a loss of 393 million.
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.
THE POSITION OF LABRIOLA
For Tim's number one, the fall in the stock market is unjustified. “Not everyone understands our strategies and there are not the right market reactions,” commented Tim's CEO during the Capital market day press conference, assuring that the company will keep its promises.
“I think that the evaluations of the numbers of this industrial plan must be done in cold blood – explained Labriola – of course we will have to better explain certain issues relating to some numbers, but the plan envisages positive growth, estimates a significant reduction in leverage up to 1.6 times in 2026, provides for the possibility of returning to generating cash and remunerating members".
Furthermore, Labriola 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 splash of the title. “Something didn't go well in terms of communication – echoed CFO Adrian Calaza – It's important to look at the bond price, if we look at that screen it's positive, so maybe it's too early to understand why the day went like this”.
Precisely for this reason, the CEO explained that the company will evaluate and analyze the situation "also to understand the anomalous volumes: I can understand some aspects not understood, but we have always said that the deleverage is below 2. We will better analyze the volumes linked to exchanges'”.
CONSOB'S LIGHT ON TIM STOCK ON THE STOCK EXCHANGE
Since yesterday the authority that supervises the financial markets has been carefully monitoring stock market trading, characterized by exceptionally high volumes and very strong tensions, Ansa reports today.
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.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/che-succede-al-titolo-tim-in-borsa/ on Fri, 08 Mar 2024 15:24:36 +0000.