A disappointing trading update has prompted a sharp fall in Vodafone stock prices on Tuesday, and Vodafone answers that by stating they will buy £1 billion worth of its own shares. The statement comes from Vodafone as shares dropped 14% to £1.29 on Tuesday when it warned revenue could suffer from an economic downturn. However on Wednesday stock rose 2.5% to £1.32.2
According to the BBC website, this stock buy-back plan is subject to approval from Vodafone shareholders. Vodafone has said this buy-back “reflects the board’s belief that the share price significantly undervalues the firm.”
Arun Sarin, Vodafone’s chief exec who is due to step down later this month has said the company faced a more “challenging operating environment.” Arun Sarin will be replaced by his deputy Vittorio Colao.
According to Vodafone revenue to 31st March 09 would be £39.8 billion to £40.7 billion, and adds that cost cutting will mean its profit forecast for the current year is set to meet their original prediction.