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Fastweb (FWB): IPO pioneers lose 68% on “friendly takeover bid”. Sad story for “we, the people” March 12, 2007

Posted by deminvest in European Stocks, FWB Fastweb, growth stock, Internet stocks, investment, investment strategies, Italian stocks, Single stocks, stock I own, stocks.

We, the people, sometimes lose money even when we decide to bet on the good horse.


This is the story (without… happy hand):

Once upon a time there was only a monopolistic Telecom Operator in Italy: Telecom Italia.

Italy had to make its Telecommunications markets more open (because of European Community). Start up operators came out like mushrooms. All of them reselling Telecom Italia ‘s services. Their main jobs were:

1) to cry with regulators, politicians and press begging for lower prices from Telecom Italia.

2) to fload us with stupid advertising

2) to bill us.

One day in 1999, a courageous captain – Silvio Scaglia – came up with a great idea: to lay the first widespread fibre optic network in Italy. Yes I know… they have such networks since 20 years ago in the US, but for Italy it was revolutionary.

Many investors followed Scaglia and, in year 2000, trough a huge IPO at EUR 147 per share, gave him the huge capitals needed to build such network.

Then there was .com bubble, the company continued to spend the money we, the people, had given and continue to post losses every year, while building its great fibre optic network.

Now everything looks great:

1) Most of fibre network is working,

2) Wi Max is going to make Fastweb’s network an incredible Asset,

3) Fastweb delivers 9% dividend yields

4) Fastweb expects, for the first year ever, to move to a net profit in 2007!

5) I buy 25 Fastweb shares

Time to cheer for simple investors who had a vision back in 1999? Of course not! Time to cheer only for the Big Guys! About a month ago Scaglia sold a 6.25 pct stake in Fastweb sending FWB stock down 10%, even with those good results, then there was a small sell-off on global markets. Perfect time to steal the toy from invertors who had a vision and who are now seing their dream come true!

– Swiss telecoms group Swisscom (SCMN.VX) has proposed a 3.7-billion-euro friendly takeover bid for Italian broadband operator Fastweb (FWB.MI) in a move to break free from stagnant growth in its home market. The state-controlled Swisscom said on Monday it would offer 47 euros per share for the firm.

Very nice! Investors who built Fastweb by pocketing EUR 147 a share, are now forced to sell them for EUR 47. If they don’t they’ll probably end up holding shares of a delisted company.

We, the people, are often slaughtered by market movers, but we are still here. We are many. We learn from our mistakes and we will rule stock markets, which rule modern global World.


1. deminvest - March 12, 2007

Interesting… Fastweb now over 47. The market believes the takeover bid at 47 maybe won’t be accepted

2. Rebekah - March 18, 2007

I’m not sure if you give out this kind of information, I’m new to the stock market scene. I was wondering how you go about buying stocks and what do you think about the plans through Mellon Bank?

3. deminvest - March 18, 2007

Dear Rebekah,

The best advice I can give you is :

1) Don’t trust anybody with your money.
2) Don’t trust me or my advice.
3) Trust your bank even less than you trust me.

I am just someone like you, trying to invest some savings.

Don’t consider my advise as coming from an expert.

I always run away from plans proposed by banks. People who work for banks and who propose those plans are there to sell you something good for the bank and not for you.

Do you know what will happen to you if you accept their plan proposal? They will invest your money and use about 4% of it every year to pay their (fat) salaries.

They will invest your money on the same stock you could buy, but, by using 4% of it for paying themselves every month, THEY WILL GET MORE THAN 40% of your investment in 10 years!

So it is a big NO.

If I were you I would look for solid stocks that pay good dividends. I own GE, world’s largest company, which is performing well, is growing and is also returning dividends of 3.2% a year.

If you really want to pay some commissions and you are afraid to put to much on a single stock, you can buy some ETF (exchange trade funds):
they usually take less that 0.5 % a year from your invested money.

Another important advise is to invest your money on stock in chunks.

If you plan to invest $40.000, buy stocks (or ETFs) for $1,000 every month for 40 months. Try to chose a different one every month.

Good luck Rebekah!

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