Investors Tell Vodafone To Dump Verizon
Vodafone has been under increasing pressure from institutional investors to chill out on acquisitions and change its strategy to focus on returning profits to shareholders. The company’s increased dividends and stock buybacks, but is now facing calls that it sell its 45% stake in Verizon Wireless and give the money to its shareholders. The Verizon stake doesn’t make a lot of sense for Vodafone these days, since it’s got no management control and Verizon uses CDMA technology, rather than GSM. The Times asserts “selling Verizon would mean Vodafone abandoning its ambition to be the world’s leading cellular company,” but that’s not necessarily true — Vodafone didn’t have many qualms about ditching Verizon Wireless when AT&T Wireless was up for grabs, and its ownership stake in the US carrier really doesn’t do much for the company, particularly since Verizon no longer pays Vodafone a dividend based on the wireless unit’s financial performance. The stake in Verizon Wireless now serves only as an investment that’s going to realize any value for the company — and its shareholders — when it’s sold.
