1&1 Trades

[moritz]

Trades of 1&1 Stock. Feel free to post your trades or discuss your outlook.

[moritz]

I increased my 1&1 position by 50% at a price of 10.94 EUR following a national roaming agreement with Vodafone. I will continue reflecting on this decision and might adjust it soon.

1&1 Vodafone Deal

SI=10%+, I=10 Very important news from 1&1. They reached a binding preliminary agreement with Vodafone for a long term national roaming partnership. The contract starts at least by 1. Oct. 2024 and will last 5 years. 1&1 has the right to renew it 2 times for an additional five years and there will be a three year transition period after the contract ends. This means the contract can last until 2040 if 1&1 draws its renewal options. 1&1 will have full access to Vodafone’s network including 5…

[moritz]

A preconfigured sell order went through to sell half of the new 1&1 shares at 12.10€. Given that Q2 2023 results were slightly worse than expected (slower network buildout) and there is no news yet about the Vodafone deal I did not attempt to buy the shares back.

We will get more Info at today’s conference calls at 13:00 German time. Stock will likely continue to stay volatile.

[moritz]

Insights from the 1&1 conference call have been good and cleared some of the concerns. I increased the position again at 12,88€. It is now 2/3 larger than before the new deal with Vodafone.

[moritz]

I sold 28% of my position right in the morning at exactly €18.50 following those news

1&1 News

United Internet wants to acquire 9.19% shares of 1&1 at EUR 18.50 United Internet wants to acquire 9.19% shares of 1&1 at EUR 18.50 through a public offer, taking its stake to 90%. United Internet said a free float of at least 10% of 1&1 shares is to be maintained, allowing sufficient stock exchange trading. A domination and/or profit and loss transfer agreement, a delisting and/or a squeeze-out are not planned. The offer represents a premium of 20% over yesterday’s closing price and around 29…

My reason was to

1. Take some profits, reduce risk and have further liquidity for other investments and
2. Short term price risks after the tender is concluded. I think there is a risk that more shareholders will tender their shares than United Internet is willing to buy leading to quotas and pressure on pricing afterwards.

Given that I was even surprised to see share prices higher than €18.50 for a short period of time.

Overall I still see 1&1 as attractive even at the current valuation.

[moritz]

I transformed my remaining 1&1 position at EUR 18.54 into shares of United Internet - the parent company of 1&1 - at EUR 24.30.

My main reason was the risk of a squeeze out as described by @Aron here and that an investment in the parent company aligns us better with the interests of the company at large and Dommermuth.

Similarly to 1&1, United Internet is attractively valued and the success of the investment will depend heavily on the new 1&1 network.

If i will find the time i might elaborate further on the decision.

I remain interested as well to increase the position depending on more research and an even better understanding of risks (e.g. Network progress, risks of getting fined by BNetzA for failure to meet coverage obligation etc.)