RCS, THREE LEADS TO DECIPHER THE CRAZIEST INCREASE OF THE SUMMER
However the stock market week ends, no one will be able to deprive the RCS Media Group title of the Golden Lion for the most incredible and (for now) least understandable performance in the script of world stock exchanges. In just four sessions, the share in via Solferino gained, with impressive volumes, 113%. Only yesterday 4,8 million pieces were traded, against a daily average of the last month (which, however, was already affected by the last few sessions) of 766 pieces.
The reasons? There are two strands of explanation of yellow: 1) expectations on the plan to reduce debt through disposals; 2) the hypotheses of a restructuring of the strategic shareholdings by Mediobanca, the first shareholder of RCS with 14,3%.
With regard to the debt reduction, a first step was taken yesterday: the French Antitrust gave the go-ahead for the sale of Flammarion, a publishing house controlled by RCS, to Gallimard for 251 million euros. The operation will lead to a reduction of the debt to around 750 million from today's billion. Now it could snap the phase two: the sale of real estate assets, including the headquarters in via Solferino (estimated at between 200 and 250 million) and, perhaps, the stake in Dada from which, net of debts, between 35 and 40 million could be obtained. In this way the new CEO Pietro Scott Jovane could bring the level of debts below the threshold of 500 million. That is, at a level that could prevent an otherwise obligatory capital increase.
But the group's situation, even after the weight loss, is not such as to let them sleep peacefully: the level of debts would in any case be equal to more or less three times the ebitda generated by the group's activities. Nor does the trend in advertising sales or, even worse, the recessionary trend of the economy show the possibility of a prompt industrial recovery. Even if Scott Jovane proves to be a relentless cost cutter, Enrico Bondi style.
Furthermore, it is not easy to explain the surge in RCS with the rumors, not denied, of a plan for a capital increase massive, between 4 and 500 million. These days, the mere hypothesis of asking shareholders for money causes the stock to collapse. And not vice versa.
Therefore, it is inevitable to look for an alternative and/or complementary explanation to the rally. The path to solve the yellow inevitably leads to Piazzetta Cuccia. On September 5, the Mediobanca board of directors will have to deal with the thorny case of Alberto Nagel, investigated by the Milan prosecutor's office for the famous papello signed together with Salvatore Ligresti. According to reports, the incident offered one or more shareholders the opportunity to ask for a change of course in the bank's strategies, which certainly no longer benefit from the traditional function of holding safe; an attitude that is too "plastered" to face an economic situation that would require much more dynamism. Nagel seems ready to accept the challenge, even at the cost of diluting Generali's historical leadership or finding a new partner for Telco.
All hypotheses to be verified, please. But, as far as RCS is concerned, the times could be closer. Nagel himself, in his summer interview with Repubblica, underlined that Mediobanca has already taken "not one but two or three steps backwards" with regard to RCS management. Potential buyers are certainly not lacking: Giuseppe Rotelli is now one step away from the relative supremacy in via Solferino; Diego Della Vale, today at 5%, is ready to go up. Furthermore, the expansion of the shareholding to an international partner is not excluded. Finally, the political situation may suggest rapid times: such an operation would certainly meet with a decisive political veto (from the right and from the left). Why not take advantage of the shield offered by a caretaker government?
So far the political and financial reading of the "mystery" which, however, does not explain another phenomenon, even more surprising: RCS's anomalous run dragged other titles in the publishing sector along with it: Espresso rose by 5,2% after the +2% achieved yesterday, Mondadori +3,5%. Il Sole24Ore is suspended with a theoretical increase of 15% after yesterday's 2,5% and last Tuesday's +17%. Caltagirone Editori and Monnrif also responded to the appeal, but not the stocks with more solid fundamentals such as Cairo or Dada itself which fall behind without participating in the rally. Perhaps because, in the first seven months of 2012 they marked a decrease of 3% and an increase of 2% respectively, while the Bigs lost between 24 and 32%.
These considerations suggest that behind the rally there is above all an action to reposition portfolios in the light of trading decisions (or rather, of algotrading) exasperated by the low free float (11% only in RCS). In the light of the quantitative analysis, the summer rally appears to be a simple repositioning of capital on the most depressed sector which, according to operators' assessments, had by now reached its lowest point.
