We explain the reasons behind some of the biggest share price movements
Thursday 07 Mar 2019 Author: Daniel Coatsworth

Shares in Vodafone (VOD) burst back to life after the telecoms giant announced plans to raise up to €4bn through issuing convertible bonds. The shares jumped nearly 3% on 5 March as Vodafone spelled out the reasons for raising the money.

It will use the proceeds to help finance the acquisition of assets from Liberty Global, for future share buybacks to mitigate dilution, and for general corporate purposes.

STAKEBUILDING ACTION

Peter Wood, dubbed ‘Britain’s Mr Insurance’, lifted his stake in insurance comparison site GoCompare (GOCO) from 25.6% to 29.9%, saying the share price didn’t fully reflect the ‘operational and strategic momentum’ in the business.

GoCompare – where Wood is chairman – has seen its valuation halve since last summer on chatter that Amazon was thinking about entering its market, as well as a lack of revenue growth and broader negative sentiment towards the insurance sector. The director’s investment triggered a near-7% rebound in the share price to 68.9p.

RELX SETBACK

No sooner had RELX (REL) delivered a reassuring message on its Elsevier scientific journals business alongside its full year results (20 Feb) than the University of California cancelled its contract with Elsevier (1 Mar) in a dispute over free access to academic research.

Despite a significant fall in the share price, Liberum analyst Ian Whittaker says the news is unlikely to have a material impact on financial results in the short-term.

However, he adds: ‘It will reignite the concerns over the direction of open access and so raises a question for the rating.’ At £16.58 RELX trades on a price to earnings ratio of 17.7-times, ahead of many of its peers in the media space.

RIGHTMOVE YO-YO

Shareholders in property website Rightmove (RMV) could be left with whiplash after the shares sank on publication of full year results on 1 March but then recovered and ended up higher overall as investment bank Exane BNP Paribas came out with some positive comment on 4 March.

The catalyst for the initial sell-off appears to have been the 2% decline in agency numbers to 17,328 but Exane notes: ‘The revenue model is increasingly based upon total contract value as agents change their physical footprints; ii) Rightmove has the pricing power to evolve its revenue model as the customer base develops; and iii) we think the risk of a rapid scaling of dominant hybrid players is receding.’

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