The BT share price popped and then erased some of the gains on Thursday. The shares opened at 190.65p and then retreated to 184p. This brings its total gains since November last year to more than 86%.
Why BT shares popped: BT stock extended its gains after Patrick Drahi, announced that he had become the biggest investor in the company. He made the investment through a new company that was opened in London.
For starters, Drahi is a well-known telecom investor, who is well-known for his ownership of Altice. Altice is a company that owns telcos in countries like Israel, Portugal, France, and the US. He took the company private in 2020 as he argued that the shares were undervalued.
By investing in BT, he becomes the biggest investor in the company. Its stake is slightly bigger than that of Deutsche Telecom, which owns a 12% stake.
This seems like a friendly investment. According to the FT, Drahi will not seek to break or buy the company in the next six months. Instead, he wants it to use the investment to accelerate its fibre network that is in high demand as more people work from home.
BT has made some progress lately. The company has said that it will sell its sports television network in a bid to raise cash and streamline operations. It has also announced plans to accelerate its fibre rollout and employ more people to achieve that. Also, in 2020, we reported that some private equity companies were considering acquiring the company.
BT share price forecast
The daily chart shows that the BT stock has been in a strong upward trend in the past few months. This has pushed it to the highest level since January last year. Subsequently, the shares have soared above the 50-day and 100-day exponential moving averages. However, the shares seem to be forming a rising wedge pattern that is shown in blue. This pattern is usually a signal that the shares upward trend is losing momentum.
Therefore, in the near term, we can’t rule out a situation where the shares retreat. If this happens, the next key level to watch is 170p. On the flip side, a break above 200p will invalidate this forecast.