What moved Telstra’s share price up to a two-and-a-half month high yesterday? Apparently the answer has two words: Alan Kohler. In his opinion piece – “A decent dose of panic will squeeze some life into T3” was published in The Sydney Morning Herald and The Age – Kohler predicted that the third Telstra sale, if it goes ahead, “will be an instalment rights issue to existing shareholders.”
“Institutional investors have largely been sellers of Telstra and are now deeply underweight,” wrote Kohler. “In fact many fund managers own none. They will be ferociously squeezed as the company goes from 2.6% of the index to 5.2% and can no longer be ignored, while their entitlements to a rights issue will be low or non-existent. If they don’t do something soon they’ll be left out.”
This warning seemed to do the trick for the share price. Telstra was one of the top five traded shares on the ASX yesterday, both in volume and value, sending the stock up 12 cents to $4.10. That’s a 3% rise in one day – the biggest rise in the stock since CEO Solomon Trujillo’s briefing on the company’s future in mid-November last year. And, according to our records, the last time Telstra went up more than 3% in one day was 11 October 2004, when it rose 3.2%.
Not bad for a day’s work in the life of a hack.
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