TPG shares have been dumped, sending the stock plummeting more than 18 per cent and shedding a billion dollars from its market value, after it revealed plans to build Australia’s fourth mobile network
The broadband internet and mobile provider last week agreed to pay $1.26 billion for a chunk of the nation’s 4G mobile spectrum and revealed it would spend another $600 million building a mobile network to rival those operated by Telstra, Optus and Vodafone.
TPG shares have been savaged. Photo: Rob Homer
TPG entered a trading halt last Wednesday, prior to the announcement, and detailed a $400 million share entitlement offer to fund construction of the new network.
Upon returning to trade this morning, TPG shares plunged immediately. From a close of $6.54 per share when it entered the trading halt, TPG shares had dived to $5.42 by midday Tuesday – a drop of 17.8 per cent. TPG’s market cap has fallen over a billion dollars so far, from $5.54 billion to $4.42 billion
TPG shares hit an all time high of $12.60 in July last year.
The company said on Tuesday it had completed the institutional offer, raising a total of $81.5 million in addition to $238 million tipped in by chief executive David Teoh and other major shareholder investment house Washington H. Soul Pattinson.
“We are very pleased with the strong support that our institutional shareholders and new investors have shown for the offer and for our mobile strategy, which we are tremendously excited about,” Mr Teoh said in a statement.
Telstra was down another 3.5 per cent at $4.10 on Tuesday, after dropping to their lowest level in five years last week when TPG revealed it would bring new competition to the market.
The nation’s largest telco’s shares have fallen over 12 per cent since last Tuesday.
More to come