Tim, Labriola: “The markets didn't understand and sank the stock”
“We will have to understand what happened, but it is clear that our industrial plan has not been fully understood by the market”. Pietro Labriola, CEO of Tim, tries to calm people down during the call with journalists, after a thrilling day. At 1.30 pm the new project of a Telecom without the network is announced and, within a few hours, the stock burns just under 24% and returns to the levels of the end of 2022, when the impasse over the future of the network was consummated. Today, despite the trust shown by Tim's management, it seems clear that the market has rejected the new course.
According to Affaritaliani.it, 12% of the free float, i.e. free shares on the market, changed hands. A record volume that has made many wonder: could it be that Vivendi has started selling its shares? From Paris, for the moment, no comments. On the other hand, the French have a strong growth balance sheet, with a turnover of 10.5 billion and with the guarantee of a robust surge in profits after a year's stop.
However, it remains to be understood why there is so much skepticism around Tim and his industrial plan. Ok, market conditions are complex. But even if we turn the clock back to the time of Franco Bernabè and his 2007 plan, we don't see such catastrophic results on the stock market. The times for resolving the issue with KKR and moving on to collection have been outlined. By the summer the network will be sold and then it will be time for a new Tim, more “streamlined” and – hopefully – more profitable. The problem always remains debt, the elephant in the room that has afflicted the former Telecom since the unfortunate debt takeover bid in 1997 with which the company merged with Olivetti, effectively determining the end of the Ivrea company.
Analysts jumped out of their seats when they read that the debt, currently at 20.3 billion, should fall for the new company services and enterprise up to 6.1 billion, only to rise by a further billion in the following three years. The story has always been told precisely: sell the network – despite the sharp refusal of the French Vivendi – to reduce debt and become profitable again. Mission more than accomplished for the first part, the second seems the most complex for now. However, there is one positive fact: as Labriola recalled in the press conference, it is true that shares are collapsing, but it is also true that the yield on bonds is decreasing, a sign that there is confidence in the future. A portion of 4.6 billion euros of debt will mature in 2024. Understanding what rates it will be refinanced at will be the new Tim's first step.
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