Telstra Buy Back

[Mong]

I have Telstra shares and have received the buy back offer.

Does anyone know what the benefits are of selling shares back to Telstra? What they are offering is less than current market value which is why I'm confused.


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[Frodo]

I have Telstra shares and have received the buy back offer.

Does anyone know what the benefits are of selling shares back to Telstra? What they are offering is less than current market value which is why I'm confused.


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They are probably good for you.

The buyback cost is about $2.00 from memory and the balance up to $4.65 is a fully franked dividend. So if you sold at $4.65 that would give you $2.00 + $2.65 + $1.13 in tax = $5.78

You also get to make a capital loss. So if you sold other shares and made a profit that would be taxable then the loss made on the Telstra shares sold would offset it and reduce your tax.

 

[Mong]

Thanks Frodo.

I happen to be strongly considering selling so this buyback is a definite option for me.

With your explanation in mind I will read through the offer again and should be able to make more sense of it now. Cheers.


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[dus]

Received the same corresspondence, i definatly wont be selling.

The only advantage i see is for super funds. The fully franked divi looks nice, but it gets back to your marginal tax rate. It also gets back to the price you paid for the shares. If you bought in T2, you'll have a capital loss, but you'll have one anyway if you sell at market.

Id only be selling if you need the $$, and even then see your accountant as you may be better off selling at the market price. Companies do this when they have extra $$, feel their shares are cheap, and to boost EPS, all advantaging the shareholders that dont sell.

Still regret i took part in the TAB buyback.

 

[Dr Who]

If its in an uptrend don’t sell, if its in a down trend sell. If you cant tell the difference sell and put it all on black at the casino. Only joking, your not a 50% chance to lose it all, but seriously you need to understand the underlying trend of the price.

At the moment im not interested in TLS, if it can break 5.20ish ill have a look. Southcorp on the other hand has my interest atm as a 'potential' recovery trade. AGI could be worth a look considering its making new all time highs and the action seen in ALL.

Then again gold is on eveyones lips also, CRS offers good leverage into that game and OXR maybe worth a look.

Telstra’s a fat pig, if its not going up then id sell and buy something that is. Stuff dividends/ buybacks, if its not going up you’ll pay for the dividends in price.

For those who like a spec play, TZL with their smart fasteners and Textron deal seem good value in the low 70c’s imo (but do your own homework, it is a spec after all), i bought em at 45c.

Btw Frodo, my bank account gave me 100k + worth of credibility this week. Im happy with that, so you can keep your credibility points! Oh that’s right, im full of ******** again aren’t I? Id love for you to test me with your hard earned, lol.

 

[Frodo]

Btw Frodo, my bank account gave me 100k + worth of credibility this week. Im happy with that, so you can keep your credibility points! Oh that’s right, im full of ******** again aren’t I? Id love for you to test me with your hard earned, lol.

What's that supposed to mean?


On a more serious tone, I believe that the government will want a good price for their 51% and will be working in the background to help Telstra increase market share and profits. This should lift the price.

Hos, your marginal rate is not critical, although you could in rare situations go through a band. On top rate you pay 48.5 - 30% = 18.5%, if you are on the 0% rate you get a refund cheque. My rate is 30% so it works out straight. I am participating in the offer but I will buy back afterwards ( it will be cash flow positive for me). And yes, the reason Telstra are doing it is to increase EPS and pump the share price. But that doesn't always transpire.

 

[dus]

At the moment im not interested in TLS, if it can break 5.20ish ill have a look. Southcorp on the other hand has my interest atm as a 'potential' recovery trade. AGI could be worth a look considering its making new all time highs and the action seen in ALL.

I agree on Southcorp, quite interested myself.

Btw Frodo, my bank account gave me 100k + worth of credibility this week.

You mean credit?

 

[Gaz_87]

I love being young i can aford to hang on to them for quiet a few years

 

[Dr Who]

You mean credit?

Nope

 

[Dr Who]

I agree on Southcorp, quite interested myself.

+4.6% so far today

 

[Dr Who]

I love being young i can aford to hang on to them for quiet a few years

Do yourself a massive favor and read this book www.amazon.com/exec/obidos/tg/detail/-/1556236832/002-6098816-2544068?v=glance

 

[BB gun]

Looks like telstra is going to have a bit of a shake up at board level.