The ROI provided a negative return that should alarm the company. Several factors have contributed to the decrease of share prices of Vodafone. Vodafone Share price as reported on the London Stock Exchange (high) shows £ 1.49 for 2005, £ 1.55 for 2006, £ 1.54 for 2007, £ 1.98 for 2008 and a decreased share price of £ 1.70 in 2009. (Vodafone Annual Report) Stock price as of December 5, 2009, quoted from ADVFN is $140. The volatility of the market price depends on many factors, such as recession and company performance. The combined factors of unemployment, tight credit, competition and company performance are among the determinants of the increase or decrease of share prices of Vodafone.
The share price of Vodafone reached a high level during the first part of 2008, and dipped down during the last quarter of 2008 to 2009 the beginning of recession period. See Chart 1 Business week carried a report saying that as stocks are turning out to be great again in 2009, growth of telecom was slow. The S& Ps index is up by 21%, while telecom sector was down by 1.6% this year.
Report said that this is the only sector that is going to finish 2009 with a negative growth. 03 December 2009) It will be noted that when share prices went up in 2007 to 2008, gross profit of Vodafone remained steady while net profit was low that confirms theory that costs and operational problems of Vodafone are the source of low profitability. Economic crisis seem to have spared the business of phone companies as reports of revenues of this sector showed sales growth in 2008. According to Krause, R.
of the Investors Daily (2008) wireless phones revenue has surprisingly increased by 44% from previous years. Even before the crisis period, this report said, that the forecast of wireless phone sales will grow by 10% over a decade period. Report further said that the wireless data revenue accounted for “ 20% of all wireless revenue for the first half of 2008, which is higher by 10% two years ago” .
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