MTN Group is selling up to 575,000,000 shares in MTN Nigeria. This is the first phase of offers to reduce its shareholding in MTN Nigeria. This will reduce from 78.83% to 65%.
The sales started Wednesday, 1 December 2021, and will end by 5:00 pm on Tuesday, 14 December 2021. The shares are put on sale at the rate of N169 per share. It has a minimum purchasable share of 20 and a maximum of 250 for a single investor. The share duration (according to the MTN official website) will last for a minimum of 12 months. After this, the share subscription expires.
But how does it all work? That is the question I have encountered the most. Investing in MTN shares means that you become part-owner of the company. You stand to make a profit as a co-owner even as the company makes a profit. This is equal to the number of shares held as a proportion of the company’s total outstanding shares according to investopedia.com
This implies that if an individual owns 10,000 shares of a company’s 1,000,000, then the said individual owns 1% of the shares put on sale by the company.
There is a downside that might be worth looking into if you want to consider investing in MTN. NCC is threatening to disconnect lines that have no NIN registration. That’s a concern for the telecoms industry. This is because Nigerians are still reluctant to register their lines.
MTN is selling shares, and it’s another investment opportunity for the average investor. These two factors may make or mar success for investors in MTN’s share.
In the long run, (depending on how many people end up registering their line), it is a wise investment option, given that the population growth is not slowing down and more people will be needing lines shortly.
For the short term, it means that there might be a dwindle in the value of the shares if NCC goes ahead with the threat to disconnect lines that are not registered.
Disconnection of lines in their millions will likely affect the value of the shares. It leaves MTN with a fewer number of subscribers per time. There is no guarantee that these subscribers will all come back to MTN when they purchase new lines.
There is a lot more one can do with shares as an investor. Most of it cannot be learned from one blog post. You may want to visit us at www.zimvest.com.ng