mansfield resigns, page-5

Telstra to open between $4.35 and $4.40. From there, Telstra is likely to be weak, but should find support around the mid $4.20s. Overall, the cash and yield nature of Telstra will eventually return it above $5.00. But an even quicker catalyst for this will be Ziggy's resignation (now, more, rather than less, likely).

Overall, the late evening nature of the announcement is, in my view, negative.

If you want to bury a story, or avoid the media, then generally, you would release the announcement:
1)
after the 6.00pm news has gone to air (7.00pm also, for that matter);
2)
after the early edition deadlines for most metro dailies have passed (except, in the West);
3)
after the Institutions have published (or sent to print) their daily Research bulletins - out of the majors, only CSFB have so far briefly noted the resignation in their overnight Bulletin - JP Morgan, UBS and ABN have not (at least not in any of the research bulletins that I have so far seen);
or
4)
after market close going into a weekend.

The most telling observation from Mansfield's personal statement is the following comment:
.....
"...it has become evident to me recently that the bond of trust necessary for the Board to operate effectively has been ruptured. As Chairman, I cannot be accountable for the actions of individual Directors, but I do accept that the Board cannot operate as it does now and that the Chairman, in those circumstances, bears responsibility".

This suggests that Mansfield was:
1)
rolled;
2)
the Board is bitterly split over several fractious matters;
3)
Telstra is at further risk of losing its direction (just as it was starting to get its act together in some areas - particularly in relation to broadband);
4)
competitive gains elsewhere have started to hurt (particularly involving SGT, TEL and HTA); and
5)
Sam Chisholm is exercising some real muscle within the organisation.

I would now expect a similar situation to emerge for Telstra as has recently emerged concerning The National.

For TLS, this is a negative. For the telco sector, as a whole, this is disruptive. For telco competition (now and in the future), this could be decisive.