Tycoon’s telco bets turn bad
Carlos Slim became the world’s richest man through smart, well-timed investments. Bets he made this year on Europe’s troubled phone industry don’t look quite so savvy. On May 7, Slim’s America
Movil SAB said it would increase its stake in Royal KPN NV to 28 per cent, a 2.66-billion euro ($3.5 billion) commitment. Since then, shares of the former Dutch phone monopoly have slumped 42 per cent, making it the worst performer in the 23-member Bloomberg Europe Telecommunication Services Index.
Telekom Austria AG, the Mexican billionaire’s other big European bet was buying a 21 per cent interest in Austria’s former state-owned carrier for 883 million euros. The shares have dropped by 30 per cent since.
“Slim took on a really tough job with his investments in European telecoms this year,” said analyst Boris Boehm. “He may have to wait at least two years before he sees significant returns.”