But rumours of a large options playThe $4.50 optio

http://www.theaustralian.news.com.au/common/story_page/0,5744,4465117%5E462,00.html
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Telstra hits $4.62By Geoff ElliottJune 07, 2002
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TELSTRA shares sank to a 4½-year low yesterday and there is little hope of an early rebound.
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Some brokers have even tipped further weakness. One trading desk yesterday reported selling pressure to cover an options play struck at $4.50 a share over about 11 million Telstra shares.
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Telstra lost 6c to $4.62 on heavy volume of 38.8 million shares. Brokers said concern about revenue growth political and regulatory concern and more bad news from the mobile phone industry in Europe continued to weigh on Australia's largest company.
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The weakness came despite Telstra reaffirming that it was on target to hit its revenue target of 10 per cent growth in its mobile phone division for the 2002 financial year.
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Telstra shares have gradually been stripped of any growth premium this year. Now attention is focusing on the kind of dividends Telstra would need to pay to justify its current share price.
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Broker CSFB has a hold on Telstra. Analyst Guy Hallwright said it "does look reasonable value" at its current level.
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Mr Hallwright and other analysts don't anticipate any huge falls from these levels, but nor do they see any big jumps.
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One of Australia's most bearish analysts on Telstra, Andrew Hines at ABN Amro, in a note to clients this week warned that Telstra shares could slip further to $4.40 before finding solid support.
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"If Telstra does not increase its dividend, the share price could fall to $4.40," he said.
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Analysts have been predicting a final dividend of about 11c a share, making 22c for the year, a payout that would equate to a share price of about $4.40, Mr Hines said.
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Analysts said Telstra had the capacity to increase the final dividend, which would help boost its share price.
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Mr Hines said the share price could rally to above $5 if dividends were increased.
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But rumours of a large options play yesterday prompted some fears of further selling today.
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The $4.50 options are bets by investors that Telstra shares would head to that level and the latest weakness has forced brokers who wrote the options to sell shares to cover their positions.
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