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Potential Financial Implication of Recent Events and Its Effect on Vodafones Share Price Essay Example

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Potential Financial Implication of Recent Events and Its Effect on Vodafones Share Price

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Potential Financial Implication of Recent Events and Its Effect on Vodafones Share Price. “Alone among big European markets, the UK has five network operators: Telefónica’s O2, Vodafone, Orange, T-Mobile and 3.” (Parker, 2009).
As per the press release on July 09 the revenue of the Vodafone has been increased up to £10.7bn when considering the recent financial quarter. “But while Vodafone has shown signs of combating the recession, some areas of weakness remain said Raymond Yu, an analyst with market watcher Ovum.” (Bailey, 2009).
“Last November Vodafone's new chief executive, Vittorio Colao, announced a plan to save £1bn, designed to deal with tough trading in many of its core European markets and provide the business with funds to invest in new services.

In May, Colao said those initial cost savings would be delivered by March 2010.” (Wray, 2009).
The figure (appendix – 2) is the chart showing the variation in the share prices for 2008 and 2009. It can do down and up based on the market movements.
The price of Vodafone’s share has been decreasing when compared to the last year's share price. If the total earnings are reduced ultimately in the stock market the value for the Vodafone share also decreases. The buyers of the share will not be confident to invest their money in the Vodafone share because they fear that they might lose their money if invested.
The adverse economic condition which includes the increasing recession, slowdowns in the market affects the share price. “The share price is a reflection of the company’s financial situation and how well it is considered to be performing relative to its market.” (Principles of investment, 2001, p.2).
The banks are not providing credit for the company and it is not able to increase the profitability of the concern. The share price of the company is very much related to the profitability of the concern. It has been shown that the company’s earnings for this year have been reduced and the investors expect that the company’s future is not much safer. So instead of buying the investors will sell the share and this will reduce the share price of the Vodafone.   . Potential Financial Implication of Recent Events and Its Effect on Vodafones Share Price.

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