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TKG dropping like a stone

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Coffeebreak
New Member
Can anyone tell my why TKG has dropped so significantly in the last 2 days?
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10 REPLIES 10
Not applicable
TKG had a special div last Friday of R19. That usually happens with dividends, the share price drops by more or less the same amount.
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platsak
Super Contributor
No Vodacom to make them look good and to balance the books.
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Not applicable
I think TKG is a good company. Overtime, the share will bounce back as i think it was devalued coz of vodacom. TKG can now spread their wings with whatever they need to do without having to think about vodacom.
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eddy66
Super Contributor
I think TKG is useless without vodacom.What do they really offer that no one else offers?Fixed line and that is so 1999.
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Not applicable
In my opinion of simple logic, telkom is a dead horse. Lets forget about financial models, technical analysis, etc and look at simple basics. They just sold their lifeline, their veins, Vodacom. In lay man terms and simple logic, they have never provided a good service. I had a landline and it took forever to get it repaired. I then got a wireless connection, less problems. Now they are saying that with some of the money they will start another mobile services. That will take them a while, eg cell C. They can't really expand to Africa with their cables because they will be boomed, DRC. Anyway, amoung the youngsters who still wants a landline that is forever down? Their business will remain with the companies and one thing for sure is that they know that they lost a consumer (me and you). Mobiles phones connect (HSDPA, etc)at accepable rates and their technology is evolving day by day? Cellphones TVs? Like Sasol before the waiver of wind tax, that is where I see telkom. watch out until they finish paying off the dividends, gravity might take effect. Maybe a short term rebound to be expected.
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Not applicable
I guess time will tell!
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Vano
Regular Contributor
I agree with Smallmaster. Telkom needs to get rid of the landline business. Starting a new cell phone operation is probably not feasible in this country. They have to concentrate on their core competency, which most people wil not agree with me ... is the provision of telecommunication switching and transmission (exchanges and trunk / overseas lines), NOT the provision of landlines.
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bangbul
Regular Contributor
I'm betting on a deal with big int. cell co. Last time tkg price were at R185, but then vod were the drawback
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Not applicable
Land lines are still important (wireless tech isn't anywhere near fibre optics etc). If telkon can entrench its fixed network it has the opportunity to be a provider of switching, hosting, data etc services. The reality is while it may not be the most exciting business that doesn't equal a bad investment. Even a company that is cash generative, profitable and staggers to a slow and inevitable death in 10 years is still worth quite a few billion.
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Vano
Regular Contributor
You are correct, Mer, landlines are important. Bottom line: Landlines (Copper wire technology) are expensive to maintain, easily compromised by things like copper theft, weather, e.t.c. In my opinion, Telkom is making a big loss on their copper network. The only thing that kept them going in the last few years, was Vodacom, now history. Investors buy a share for the dividend. I think Telkom will have to reduce it's dividend from now on, as it will be less profitable. Telkom's copper infrastructure may be worth billions, but it is a liability, none the less, due to the expensive maintenance. Telkom did try to outsource the copper network some time back, but the transaction was not successfull.
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