Re: Vodafone shares
I would say that about double their current valuation would be about right. Do not ask me for the calculation as I am anly guessing.
I think that is fairly close to the mark. Here's a stab at calculating it.
The original purchase price was €3.90. They were bought out at €1.27 so the loss not including the vodafone shares was €2.63.
0.9478 Vodafone shares were given for every two eircom shares when eircell was sold. This equates to 0.4739 Vodafone shares per eircom share.
Vodafone did a return of capital to shareholders last year that works out at about €0.12 per eircom share, subtracting that the loss is €2.51 per original eircom share.
Now I'm going to assume that all vodafone dividends were reinvested into the share buy back scheme (as that's what I did) and ignore income tax that was paid on them.
Assuming the above for every 1 original vodafone share given in exchange for eircell a shareholder would now have 1.0753 current vodafone shares.
So we get 1 eircom share = 0.5096 current vodafone shares (0.4739 x 1.0753).
The value of a Vodafone share last Friday was €2.53. This equates to €1.29 (2.53 x 0.5096) per eircom share.
This brings the loss per eircom share to €1.22 ( 2.51 - 1.29).
To make up this loss the current vodafone shares would have to increase in value by €2.39 (= 1.22 / 0.5096) per share.
This means the Vodafone shares need to increase by another 94% for break even.