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Is Vodafone becoming vulnerable to Verizon?
(Observer (UK) Via Acquire Media NewsEdge) If the reception to the latest numbers from Vodafone's challenged European operations is patchy, the mobile network's shares could take a hit this week when it updates the market.
Still, a dip might add to the opportunity identified by hedge-fund trader David Einhorn, who reckons that after years of takeover-fuelled growth, Vodafone itself might become a target.
Einhorn - who is perhaps now best known for being fined by the Financial Services Authority for insider trading last year - has shared a theory with investors in his Greenlight Capital fund on why US broadband company Verizon Communications could bid for the UK group. The two firms have been squabbling for years over their co-ownership of America's largest mobile phone network, Verizon Wireless, and Einhorn reckons the stock market values Vodafone's 45% stake at zero. With that kind of discount, the Americans might as well take out Vodafone and regain full control, he says, and the theory has helped recharge Vodafone shares.
Still, investors won't need reminding that Einhorn doesn't always call it right. The same letter also announced that he'd started buying Apple shares. Two days after publication, a trading update knocked $50bn off the iPhone maker's value.
(c) 2013 Guardian Newspapers Limited.
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