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Telecoms giant Vodafone hit its highest level in seven months following reports it was considering mergers in the UK and Italy.

The shares jumped 4.5 per cent, or 5.32p, to 122.86p after it emerged the FTSE 100 firm held talks late last year about buying rival UK mobile network Three from Asian conglomerate CK Hutchison.

If a deal goes through Vodafone will add Three’s 9.3m customers to its existing 20m, making it a huge player in the British telecoms space.

Merger rumours: Vodafone shares jumped 4.5% after it emerged the firm held talks late last year about buying rival UK mobile network Three from Asian conglomerate CK Hutchison

Merger rumours: Vodafone shares jumped 4.5% after it emerged the firm held talks late last year about buying rival UK mobile network Three from Asian conglomerate CK Hutchison

However, such a tie-up would draw scrutiny from regulators. Vodafone also entered separate talks to merge its Italian business with that of French rival Iliad in a deal that could create a £5billion telecoms powerhouse in the country.

The talks were first reported by Bloomberg. The discussions came as Vodafone attempts to fend off speculation that it could become a takeover target.

The City is awash with rumours that a US telecoms firm or private equity shark could be eyeing the group following a £9.1billion (€10.8billion) swoop on peer Telecom Italia by New York-based buyout group KKR late last year.

Stock Watch – Cake Box

Egg-free cake maker Cake Box plunged to a ten-month low after a financial blog alleged errors in its accounts.

A blog post last week highlighted what was claimed to be an ‘erroneous’ entry into the firm’s cash flows as well as historic mistakes in stock control. It also noted apparent issues with bookkeeping.

Cake Box acknowledged there had been ‘transcription errors’ in its results but these had no impact on profits.

The shares slumped 17.9 per cent, or 58p, to 267p.  

Meanwhile, it was less good news for major housebuilders, which came under pressure after a bleak assessment of the cladding crisis from analysts at Jefferies.

The broker said share prices in the sector could see ‘significant volatility in the coming months’ as the Government ramped up pressure on builders to foot a multi-billion pound bill to remove unsafe cladding from their properties.

Jefferies also warned that the cost to some companies ‘may have to increase’ and that Housing Secretary Michael Gove ‘will seek to make life as difficult as he can for all involved’. 

Persimmon slumped 6.2 per cent, or 159p, at 2390p while Berkeley fell 6.4 per cent, or 280p, to 4090p, Barratt dropped 8.9 per cent, or 60p, to 614.4p and Taylor Wimpey lost 6.1 per cent, or 9.6p, to 147.05p.

Their FTSE 250 counterparts were also on the slide, with Bellway sinking 6 per cent, or 180p, to 2803p, Redrow falling 5.5 per cent, or 35p, to 602p, Countryside Properties shedding 5.3 per cent, or 16.6p, to 294.6p, Crest Nicholson dropping 5.6 per cent, or 18.4p, to 311.4p and Vistry tumbling 6.9 per cent, or 74p, to 1005p.

The FTSE 100 dropped 2.6 per cent, or 196.98 points, to 7297.15 while the FTSE 250 tumbled 3.6 per cent, or 810.74 points, to 21452.5.

Markets continued to fret about the rising tensions between Ukraine and Russia, which some analysts fear could cause energy prices to spike further, adding to existing inflation concerns.

The prospect of more interest rate hikes when the Federal Reserve meets on Wednesday also unsettled traders. Meanwhile, the ongoing slump in US tech stocks continued to hit investment firms.

Scottish Mortgage Investment Trust, which holds stakes in Tesla and Nvidia, slumped 8.6 per cent, or 95p, to 1014.5p. Baillie Gifford US Growth Trust sank 7.6 per cent, or 17.5p, to 213p. Allianz Technology Trust fell 7.9 per cent, or 22p, to 255p.

The sell-off also spread to London’s tech firms, with payments group Wise tumbling 7.6 per cent, or 49.8p, to 605.2p while food delivery group Deliveroo dropped 4.6 per cent, or 7.5p, to 155p.

However, the shift away from riskier tech stocks was a boon for shares in more defensive firms as investors looked for safer places to park their cash. 

Tobacco giant BAT rose 1.5 per cent, or 46.5p, to 3184.5 while rival Imperial Brands edged up 0.3 per cent, or 5p, to 1736p.

Consumer goods giant Unilever was among the strongest blue-chip risers, gaining 7.3 per cent, or 268.5p, to 3943.5p amid hopes the arrival of activist investor Nelson Peltz could revive the firm’s fortunes after its failed bid to take over Glaxosmithkline’s (down 2 per cent, or 32.6p, to 1614.6p) consumer health business.

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SINCE YOU ASK: Here we explain baffling stock market terminology and how you might stand to profit – this week it’s Spacs










What does Spac stand for? 

A Spac is a special purpose acquisition vehicle, an ’empty shell’ company floated on a stock exchange. 

The money raised is used to purchase another firm, usually a private one that is not listed. The idea is to bring that business to the stock market faster and less expensively than by taking the normal route.

If an acquisition cannot be found within two years, the cash has to be returned to the original shareholders. That can cause a stampede to find something to buy, whether it is suitable or not. It turned into a Wall Street craze. Such was the popularity of Spacs in 2021 that 334 deals were done with a value of $597billion – 10 per cent of mergers and acquisitions worldwide. 

Change of mood: A Spac is a special purpose acquisition vehicle, an 'empty shell' company floated on a stock exchange

Change of mood: A Spac is a special purpose acquisition vehicle, an ’empty shell’ company floated on a stock exchange

Why the excitement?

At the height of the Wall Street Spac feeding frenzy in late 2020 and early 2021, the profits were often handsome. 

The cult of personality played a role. Sir Richard Branson, Jay-Z and Donald Trump are among the figures associated with Spacs. When Trump announced he was launching a media company to merge with a Spac, Digital World Acquisition, its share price soared. This get-together is yet to happen, however. 

What’s the mood now? 

Excitement has abated as a result of disappointing performance. The price of the De-Spac ETF (exchange traded fund) is down around 41 per cent over the past 12 months. There are anxieties over the quality of some of the companies acquired. 

Usha Rodrigues, a professor of corporate finance at Georgia university, likens some of the mergers to hasty Las Vegas weddings.

Who makes money? 

Hedge fund investors, who may borrow to invest in Spacs before they are listed, will make a killing if there is a price ‘pop’ (a sharp rise) at the start of trading. The banks that advise Spacs can also earn lucrative fees at various stages. 

Private investors, by contrast, are only permitted to buy the shares after they start trading – sometimes at an inflated price. 

But many will still be tempted to take the risk if a celebrity is involved, which is ‘never a good idea’, according to the SEC, the US watchdog. 

Are Spacs coming to the UK? 

Amsterdam has become Europe’s Spac capital, with listings including one sponsored by Bernard Arnault, boss of luxury goods giant LVMh. Branson is expected to list another Spac in Amsterdam this year. 

The UK would like to grab a slice of the action to affirm the City’s status as a financial centre. Rishi Sunak is said to be pro-Spac. Some listing rules have been relaxed, such as those on reverse takeovers (where a smaller company snaps up a larger business). To date, London can boast only one Spac, although more could arrive in spring. 

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Peloton bosses sold more than £360m worth of stock before fitness firm’s share price crashed










Bosses at exercise bike maker Peloton sold stock worth more than £360million before the share price crashed last year.

Chief executive John Foley and other executives offloaded millions of shares at prices over $100 before a profit warning triggered a plunge in November, US filings show.

The fitness company, whose bikes start at £1,350, had already taken a hit in May when it recalled all its treadmills in the US and the UK after a child died when he was dragged underneath the machine.

Peloton - whose flagship bikes start at £1,350 - had already taken a hit in May when it recalled all of its treadmills in the US and the UK after a child died when he was dragged underneath the machine.

Peloton – whose flagship bikes start at £1,350 – had already taken a hit in May when it recalled all of its treadmills in the US and the UK after a child died when he was dragged underneath the machine.

It then had a high-profile setback in December when a lead character in Sex and the City, Mr Big, died after an intense Peloton workout in the first episode of the TV show’s reboot, And Just Like That. 

Analysts said that it raised questions of whether ‘Peloton is losing degrees of control over its storytelling’.

Peloton released a spoof advert starring Mr Big actor Chris Noth, which was pulled when assault allegations against him emerged. 

Peloton floated on the US Nasdaq in 2019.

Its shares have nosedived by almost 80 per cent in the past year. Last night its stock was worth $31.84.

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SINCE YOU ASK: Here we explain baffling stock market terminology and how you might stand to profit – this week it is IPOs

  • IPO stands for Initial Public Offering, but the noun has been turned into a verb 
  • The UK is set for a boom year for floats in 2022, experts claim  










What is an IPO? 

When a privately-owned company sells its shares for the first time through a stock exchange, it is said to be floating, or listing. 

Older readers will remember the floats of the privatised utility companies, back in the 1980s and 1990s. 

These days, people increasingly use the American term ‘to IPO’. 

American term: IPO stands for Initial Public Offering, but the noun has been turned into a verb

American term: IPO stands for Initial Public Offering, but the noun has been turned into a verb

IPO stands for Initial Public Offering, but the noun has been turned into a verb. 

The company hires lawyers and banks who assemble a prospectus with detailed information about the business and the number of shares to be sold to raise capital

The banks will also underwrite the float. These professionals earn handsome fees. Of course they do. 

The UK is set for a boom year for floats in 2022, with companies like fashion retailer Very, craft beer maker Brewdog and Starling Bank forming a queue. 

How do they set the share price? 

The price of the shares is set close to the time when the company is set to make its debut on the exchange. 

It is partly determined by the anticipated level of demand: if this is high, the float may be oversubscribed and applicants for shares will have their allocations cut back. If the float is under-subscribed – because of a nervous mood in the markets, say – allocations will be met in full. The bank that has underwritten the float will buy any surplus.

What happens when the shares start trading? 

Some floats are warmly received, sending the shares soaring. Others are met with indifference or hostility. 

Despite the lauded expertise of advisers, there is no fail-safe way to gauge the markets’ sentiment in advance. 

Two UK companies were among those that got off to a great start in 2021. Darktrace, the Cambridge cyber security company, floated in April. Its shares, offered at 250p, rose to 330p. Moonpig, the greeting card company, also fared well, jumping from 350p to 440p on the first day.

So floats are a great way to make money? 

Sometimes, but not always. The risks are high and there can be a lot of hype. A float may flop because of doubts about the company’s management or prospects. 

The March 2021 float of food delivery service Deliveroo was dubbed ‘the worst IPO in London’s history’. The shares, offered at 390p, slumped by 26 per cent on the first day, a debacle blamed on a list of factors. They now stand at 197p.

Can anyone apply for shares? 

Er, no, not always. Small investors are excluded from many floats which are open only to financial institutions. 

Exclusions may apply: Small investors are excluded from many floats which are open only to financial institutions

Exclusions may apply: Small investors are excluded from many floats which are open only to financial institutions

As a result, small investors miss out on the profits that can be made in early trading. All very unfair. It is short-sighted too. In many businesses, offering shares to customers could create a loyal and stable shareholder base, along with a great deal of goodwill. 

Could this change? 

PrimaryBid – whose app makes it easier to apply for shares in a float – is one of the organisations pressing for reform. Richard Wilson, chief executive of Interactive Investor, argues that for legislation requiring all companies to reserve a chunk of shares for small investors. Why should a float be called an IPO if the public are shut out? 

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