Surprising Rise in Telefónica Shares After Government Announcement: Financial Implications and Investor Caution

Government aims to quickly reach 10% stake in Telefónica, causing stock to surge to May highs

On Tuesday, Pilar Alegra, the Government spokesperson, announced at a press conference that the Executive expects the State Society of Industrial Participations (Sepi) to acquire 10% of Telefónica in a short period. However, this statement caused an unexpected outcome, as Telefónica’s shares rose for the first time since May 2023. By 4:30 p.m., the shares had reached 4.08 euros, representing a 2.26% increase.

The government had initially estimated the cost of acquiring a 10% ownership stake in Telefónica to be around 2.1 billion euros. However, Sepi’s current ownership stake of 3%, valued at over 700 million euros at market price, has significant financial implications for the government compared to the initial estimated cost. To reach a 5% stake in the capital, an additional 1,600 million euros will need to be invested.

As Sepi is not required to disclose new purchases until it reaches a 5% stake in the capital, it is crucial for all stakeholders to closely monitor this situation and its potential impact on both the telecommunications industry and the government’s budget. The rush to complete the operation could potentially increase the final cost by tens of millions of euros.

In conclusion, while Pilar Alegra’s announcement was intended to inform investors about expected changes in ownership structure for Telefónica, it resulted in unexpected consequences that could have significant financial implications for both investors and governments involved. As such, all stakeholders must carefully monitor this situation and consider their options before making any decisions or investments related to Telefónica or similar companies within the telecommunications industry.

It is important for all stakeholders to take note that any investment made in such situations carries inherent risks that may result in losses or gains beyond what was initially estimated or predicted.

Therefore, it is essential that all parties involved approach these situations with caution and seek expert advice before making any decisions regarding their investments or portfolios.

In summary, while Pilar Alegra’s announcement may have been meant as an update on expected changes in ownership structure for Telefónica

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