BT has a disaster week

BT is having a complete disaster. Everything it touches turns to poo. Every time a decision or an announcement is made, the company becomes worth less than it did five minutes earlier.

The only time we can remember that the share even nudged up slightly was when Sir Iain Vallance left and Sir Christopher Bland walked in. Oh no, hang on, it fell then too.

The new board - with Sir Pete Bonfield still clinging on for £5 million - announced (another) bold restructuring a fortnight ago. The shares went down. It managed to reduce it debt by £5 billion. Its share price went down (because it had sold its stakes in Japan - a good market). It announced a rights issue. Its shares went down.

Yesterday it was the rights issue that did it. It was the first day of trading in the rights - which will allow existing BT shareholders to buy three new shares for every ten you have at a large discount. People just aren't sure that long-suffering shareholders are going to cough up even more money in the hope that the new board can finally make money. [Oddly, the only one that we have any real faith in is the only one without a knighthood - FD Philip Hampton]

So shares fell 5 per cent yesterday and have fallen another 1.25 per cent today. It currently rests at 457.25p, a long, long way from its all-time high of 1,500p just over a year ago. Check out the graph below (taken from online financial news site Etrade.co.uk). It shows BT's share price over the last year. Do you see a trend at all? ®