SHARES in Telstra -- the most widely held stock in Australia -- slumped below $3 each today for only the second time since the company listed on the sharemarket more than a decade ago.
The shares, which are held by more than 1.4 million individual investors, touched a low of $2.98 this morning as the six-month ban on the Future Fund selling more Telstra stock (tls.ASX:Quote,News) was lifted.
The shares were trading 2c lower at $2.99 this afternoon.
The fall extends a 12 per cent, $5 billion slide in the fortnight since chief executive David Thodey disappointed investors by cutting profit and revenue forecasts for the third time since taking over from the controversial Sol Trujillo in May last year.
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The move prompted a rash of downgrades by analysts, many of whom slashed their 12-month price targets on the stock.
But part of the recent fall can also be attributed to the stock going ex-dividend, which means anyone who buys the shares today is not entitled to the 14c interim dividend.
Telstra shares were first offered to investors in November 1997 at an effective price of $3.30, with institutions paying an extra 10c a share.
The stock did not trade below its issue price until March last year, when it fell as low as $2.96 during the depths of the financial crisis and as the federal government outlined plans to break Telstra into separate wholesale and retail divisions.
It rallied to a peak of $3.65 in August, when the Future Fund took advantage of the gains to offload 684.4m shares at $3.47 each, cutting its stake from 16.4 per cent to 10.9 per cent. At the time, the Commonwealth-owned fund said it would not sell any further shares for six months. That deadline expired today.
Although the fund has indicated it has no immediate plans to sell shares, chairman David Murray has made it clear it is not a long-term holder of such as large bloc of stock. The fund has a policy of reducing its Telstra shareholder “in an orderly manner in the medium term”.
Since Telstra first listed on the market, the benchmark S&PASX200 has risen more than 90 per cent, while shares in the company have gone backwards.
Shares open lower led by Wall StIasis repurchases preferred stock with cash
