Tim: what are the reasons for the stock market collapse? Politics and finance are wondering

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The collapse of the Tim stock on the stock market continues to raise strong doubts among financial analysts and, now, also in the world of politics, in particular in view of the crucial meeting to be held on April 23rd and which, in theory, should have reconfirmed the ‘To Peter Labriola, firm supporter of the transfer of the fixed network to the alliance established by US fund KKR and Cassa Depositi e Prestiti. The match, considered strategic by the government, suddenly appears much more uncertain and complex than it appeared just 6 days ago.

Thursday March 8, after the presentation of the plan by the CEO, Pietro Labriola, an avalanche of sales hit the stock, causing it to plummet by 23,79 percent, with volumes traded equal to 13,5 percent of the ordinary capital. An certainly exceptional event which, considered inexplicable by analysts, not only did not return after the additional explanations provided by the company to the market, but which was actually repeated on Monday 11th, crushing the stock to a minimum of 20 cents, yet another time with a surge of exchanges.

The only justification for the collapse it is the highlighting of a debt increasing by one billion: a “novelty” that was also quite possible to identify from reading the group’s accounts. The increase in the deficit, moreover, does not take into account the sale of Sparkle, from which Tim should obtain at least 800 million, nor the additional payments that KKR could recognize to the telephone group, if certain conditions occur. Payments that could bring the value of the network from 18,8 to 22 billion. It is no coincidence that all the main independent investment banks maintain a price target significantly higher than the market one and the recommendation to buy the stock. In fact, Equita sets a target of close to 35 cents; Intesa Sanpaolo and Bank of America at 40, and Intermonte – after the first slide – even at 46 cents.

The increase in debt the main problem of the massive sales certainly does not seem to be the main problem, both because it was easily understood, and because Tim’s bonds, in the same days, underwent enormously lower variations than those of the shares, with yields rising from 5,23 to 5,50, 23,75 percent. Some have begun to suspect that Vivendi, Tim’s largest shareholder with XNUMX percent of the ordinary capital, has begun to sell because it is determined to leave the group after an “Italian campaign” which certainly did not bear fruit. hoped for, and which actually cost the French group billions in capital losses, in terms of the book value of the stock.

Already in 2022 Vivendi had written down the share, and not for the first time, bringing it to a book value of 21,63 cents, from the previous 58,64. But if the French group really wanted to sell, it would have been much more convenient to wait for the sale of the network and Sparkle, with the rise in the stock that these two extraordinary operations would have entailed. Vivendi, however, has always been against the sale of the network, so much so that last week the group’s CEO, Arnaud de Puyfontaine, declared that “in form and substance the Tim plan does not have our support”.

More clarification on the reasons for the collapse could come from Consob which, as per practice, turned the spotlight on the matter already last Thursday, trying to verify, first of all, whether there had been significant short sales, perhaps then covered at lower prices in the following hours or days. The problem is that this type of operation must be notified to Consob only if it concerns at least 0,2 percent of the capital and, as reported to Nova by a financial analyst who requested anonymity, “anyone who wants to ‘move’ the stock could entrust tasks to multiple intermediaries, so as not to allow coordinated actions to emerge, but to move sufficient volumes to trigger the algorithms of institutional investors”.

Tim’s spokespeople, on this hypothesis, they take refuge behind an ironclad “no comment”, even if the company’s top management immediately began to question the nature of the stock market movements, unanimously considered anomalous. In view of the meeting of 23 April, the outgoing Board of Directors has presented a majority list which also includes representatives of Assogestioni, so as to try to limit the damage, in the event that someone decides – by 28 March – to present a list alternative: Vivendi itself, or maybe Merlyn Partners, which at the end of last year presented an alternative plan with the support of Stephen Siragusa, a plan that did not include the separation of the fixed network, and which was rejected with annoyance by the government.

The suspicion that begins to emerge, even in government circles, is that someone is therefore trying to undermine the credibility of the CEO, making the plan presented by Labriola unpopular with the market, so as to overturn the current top management structure and block the plan for the sale of the fixed network and Sparkle. The fact is that, apart from CDP, which controls 9,81 percent of the group, approximately 44,20 percent of Tim is in the hands of institutional shareholders who, in recent similar financial transactions, are always aligned en masse in favor of the outgoing Board of Directors.

It is by no means certain that we will be able to shed light on a possible similar plan and, above all, it is far from certain that such a plan exists, but the lack of concrete motivations, when such masses of money are moving, appears at least singular.

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Tim: what are the reasons for the stock market collapse? Politics and finance are wondering