This time last week, shareholders of Telstra Corporation Ltd (ASX: TLS) were celebrating the ASX telco making a new 52-week high. Yep, the Telstra share price hit $3.58 a share last Wednesday, a new 12-month high. But this week, things aren’t so rosy. The Telstra share price is currently trading at $3.48 a share after rising 0.72% today. That’s a week-on-week slide of 2.4%, almost enough to cover the value of one of Telstra’s semi-annual dividend payments.
So what gives? Was last week as good as it gets for the Telstra share price?
No news is good news?
Well, after a quick examination, it’s clear that Telstra’s slide over the past week has very little to do with the telco itself. There have been no official announcements or news out of Telstra since 23 April. And that was a positive announcement that concerned Telstra spending $277 million to acquire new 5G spectrum rights.
Instead, it appears Telstra has been caught up in the general market malaise that has prevailed on the ASX boards over this week so far. After touching a new all-time high of 7,172 points on Monday morning, the S&P/ASX 200 Index (ASX: XJO) has been retreating ever since, down almost 2% since its new high.
My Fool colleague Bernd Struben talked to eToro’s Robert Francis about the retreat this morning. They discussed how this selloff might just be some routine panic selling that can happen when markets hit a new high watermark.
This might be spilling into the Telstra share price. After all, nothing else has changed with Telstra. It will still be paying out 16 cents per share in dividends in 2021, giving the Telstra share price a grossed-up yield of 6.57% on current pricing. Its 5G rollout is still on track to cover 75% of the Australian population by the end of June. And it’s still planning on structurally separating itself into 4 separate divisions by December – a move that’s been welcomed by investors.
About the Telstra share price
Even though a retreating share price is never fun for owners, things could be worse. Telstra shares are still up more than 15% year to date, and up almost 20% since late October last year. On the current share price, Telstra has a market capitalisation of $41.21 billion, and a price-to-earnings (P/E) ratio of 23.25.