Vodafone share price is still at risk despite Xavier Niel investment
Sep 23, 2022
It is unclear whether he will call for changes in the company.
The stock recently formed a triple-top pattern on the daily chart.
Vodafone (LON: VOD) share price has come under intense pressure in the past few months as concerns about the firm’s turnaround continue. The stock was trading at 109.40p on Friday, which was slightly above the year-to-date low of 106.50p. It has crashed by more than 22% from the lowest level this year.
Xavier Niel invests in Vodafone
Vodafone is a global telecommunication company that provides its services in countries like Kenya, India, Germany, and the UK.
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The firm has come under fire as the cost of doing business internationally escalates. In its most recent statement, the firm said that its total revenue rose by just 1.6% to 11.2 billion euros. Its German services revenue dropped by 0.5%.
Vodafone Business revenue rose by 1.7% while its Africa business grew supported by M-Pesa. In the first quarter of its 2023 year, the number of M-pesa customers jumped to 49.7 million while the volume of transactions rose to $5.7 billion.
Vodafone is facing numerous challenges. A key challenge is that local currencies in some of its key markets have crashed this year. The British pound has dropped to the lowest level since 1987 against the US dollar while the Turkish lira has crashed by over 70% this year.
Vodafone share price is reacting to news that Xavier Niel, a French billionaire has become a major shareholder in the firm. His firm, Atlas Investissement bought a 2.5% stake in the firm. It is unclear whether he will push for more changes in the company.
History suggests that he will likely do the same with Vodafone. For example, he bought a small stake in Unibail and helped to oust its Chief Executive. If he decides to push for more changes, he will likely have the support of Cevian, a European activist firm.
Vodafone share price forecast
The daily chart shows that the Vodafone stock price formed a triple-top pattern at 132.26p recently. In price action analysis, this pattern is usually a bearish sign. It then manage to drop below the neckline of this pattern at 115.12p in May.
At the same time, the stock has moved below the 25-day and 50-day moving averages while the RSI has moved slightly above the oversold level.
Therefore, there is a likelihood that the stock will continue falling as sellers target the next key support level at 100p.
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