Telstra shareholders not on hold

THURSDAY is the day that Telstra 2 shareholders need to make their second payment.

We have seen the managing director of Telstra indicate that if he was in the business of giving investment advice he would suggest shareholders should make the final payment.

His suggestion was based on the fact that Telstra is a solid company that would make substantial profits into the future.

This would certainly be the case but it must be said that the market reaction, which has been negative, is purely directed towards the inability of Telstra management to enter into successful agreements.

The company appears to be outside its areas of expertise when it comes to some of these issues.

The PCCW deal, which later had to be sweetened, is one example. Solution 6 was a deal that cost the company in excess of $50 million.

These are not likely to inspire the confidence of shareholders as to the future direction that management may take.

So what choice have we got? The sweetening of the PCCW deal will give traders some heart in assessing the payment options.

At least Telstra appears to be trying to walk with considerably more than it had initially anticipated.

The choices are limited and the payment of the second instalment is mandatory.’


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