RAK Rakon

[Balance]

Hardly a surprise that the sp is in free fall towards 10 cents - Bryan Mogridge is on the board - Avoid!

[Hoop]

Brent Robinson of Rakon is one of the supposedly "visionary entrepreneurs" who are finalists in this year's Entrepreneur of the Year circus conducted by Ernst & Young........




A visionary can also be a person who can see mirages that others can't see and act upon them.

[Master98]

Their request for export grants can't be far away!

Sorry, I get lost, you mean rakon don't have export grants, can only sell goods in NZ?

[moimoi]

No, I meant that they will have their hands out for govt cash.

Too late Sparky...

The company reported as "other operating income" $5.9M in government grants in 2012.

[Balance]

Too late Sparky...

The company reported as "other operating income" $5.9M in government grants in 2012.

And they still cannot make decent returns?

Looks like a sunset stock.

[Master98]

Rakon supply products to Huawei for years, this is not new.

[The BOWMAN]

Huawei should just take over Rakon, with such a give away share price, it is cheaper than the office coffee money.

[Balance]

Good on Rakon if this deal is for real and can turn the fortunes of the company around.

NZ needs companies to do well - so all power to them.

I just hope that the LOI is for real and follow through to a real deal or them.

[Master98]

Good on Rakon if this deal is for real and can turn the fortunes of the company around.

NZ needs companies to do well - so all power to them.

I just hope that the LOI is for real and follow through to a real deal or them.

Exactly.


Rakon up 20% this morning - Mr Market likes the news.

will cool down, as i said this news is not new, Huawei is not their new customer, this deal already included in their revenue.

[Balance]

Can you explain what you mean by this? As far as I can see Rakon has not come out and said they have signed a deal with a "new" customer. Secondly, and correct me if I am wrong, but an existing customer signing a LOI which quadruples sales over the next five years IS "new news" is it not? The market is certainly treating it as new news and I fail to see how "this deal already included in their revenue", actually I'm not even sure I understand what you mean here.

Sadly, a LOI with a China company is not worth the paper it is written on - I think that is what Master98 is referring to.

I tend to agree but hope for the best for Rakon. We do need NZ companies to do well.

[Master98]

Sadly, a LOI with a China company is not worth the paper it is written on - I think that is what Master98 is referring to.

lol, you read me. Bal.
a LOI with a China company is mean nothing.

[Balance]

lol, you read me. Bal.
a LOI with a China company is mean nothing.

Good PR spin though? Someone paid 53 cents this morning and now the sellers are piling up at 50 cents and sp just fell back to 49 cents.

[Master98]

Good PR spin though? Someone paid 53 cents this morning and now the sellers are piling up at 50 cents.

RAKON are very good at such promotion;)

[Master98]

quoted from comments on NBA:

"#13 by Anonymous 3 hours ago in reply to AnonymousPoor Lindsay
You obviously have not dealt with people in the real world. LOI in Asia is nothing. Everyone can write a LOI. LOI to the buyer = more free lunches, more free drinks, more free dinners, more free trips and last but not least, more price negotiation (aka cheaper pricing). That price of 56m might turn to half or less. remember, that is revenue, and then what about the cost?"

[ratkin]

56 million headline figure means little.

Its profits that are needed

[Balance]

Good PR spin though? Someone paid 53 cents this morning and now the sellers are piling up at 50 cents and sp just fell back to 49 cents.

47 cents now heading back towards 42 cents?

Those who paid 53 cents have been 'mogridged'!

[Master98]

Today's announcement:

Reflecting on overall market conditions, Rakon expects FY13 EBITDA to be ahead of FY12 with a likely EBITDA range of NZ$14 to NZ$16 million. “If we achieve the midpoint of that range it will be an 18% increase in profit over last year,” Mr Robinson said. -ends-More information:
Graham Leaming
Rakon 09 571 9202
www.rakon.com


so i think FY2013 NPAT could be still red.

[Catalyst]

mmm, NPAT won't look too flash this year either.

EBITDA = $15m midpoint of $14 - $16m guidance
less dep'n = $11m say vs $10.1m last year
less interest = $1m
less tax = $1m
NPAT = $2m

[Catalyst]

FYI, based on today's guidance figures and 47c share price, RAK is currently trading on forward multiples of:

PE = 47c / ($2m/191m shares) = 45.8x
EV/EBITDA = (191m shares x 47c + $21m net debt) / $15m EBITDA = 7.4x

and now updated for current share price of 39c....

PE = 39c / ($2m/191m shares) = 38.0x
EV/EBITDA = (191m shares x 39c + $21m net debt) / $15m EBITDA = 6.4x

[Master98]

FYI, based on today's guidance figures and 47c share price, RAK is currently trading on forward multiples of:

PE = 47c / ($2m/191m shares) = 45.8x
EV/EBITDA = (191m shares x 47c + $21m net debt) / $15m EBITDA = 7.4x

and now updated for current share price of 39c....

PE = 39c / ($2m/191m shares) = 38.0x
EV/EBITDA = (191m shares x 39c + $21m net debt) / $15m EBITDA = 6.4x


APPLE PE is 15.57, so RAKON is more vauleable:)

[Balance]

47 cents now heading back towards 42 cents?

Those who paid 53 cents have been 'mogridged'!

Quick way to lose money - share now back at 42 cents.

Well and truly "Mogridged".

[winner69]

Quick way to lose money - share now back at 42 cents.

Well and truly "Mogridged".


2 announcements in a week .... great stuff .... firstly we are goinf to sell zillions of things to this chinese customer .... and a few days ater but hang on guys we will be only be amking a bit mor than last year .... if things go right of course

mogridged well and truly

[Stranger_Danger]

I've been looking at an ASX listed company, ticker IEF, chaired by a Bryan Mogridge.

Same guy? Perhaps another one to avoid?

[winner69]

I've been looking at an ASX listed company, ticker IEF, chaired by a Bryan Mogridge.

Same guy? Perhaps another one to avoid?


same guy ....IEF has strong PGC / Torchlight connections

[Balance]

same guy ....IEF has strong PGC / Torchlight connections

Bryan Mogridge has lent his previously good name in the market to some companies and individuals.

Now he is one person you have to watch out for because as far as the market is concerned, his name is associated with failure re corporate governance and share performances.

[Stranger_Danger]

Yeah, that was my instinct. It wasn't a long look!

[Sideshow Bob]

http://www.stuff.co.nz/technology/7549000/Rakon-chases-elusive-component


Rakon chases elusive component


TIM HUNTER: YOUR PORTFOLIO


Last updated 05:00 26/08/2012


If you see a bloke dressed in combat fatigues skulking around some bushes in a seldom-visited location, there might be no cause for alarm. He is probably geocaching.

The idea is to use a GPS device to track down a hidden package, which may contain trinkets, clues to the location of other caches or simply a list of other people who found it before you.

As well as finding the way to your inner nerd, the geocaching game probably helped find a use for GPS handsets before the technology became ubiquitous in smartphones.

These days, however, global positioning systems are being installed in all but the most humble communications gadgets and New Zealand company Rakon is the market leader in GPS components called crystal oscillators.

With millions of smartphones being made every year and Rakon the self-proclaimed "expert in taking high-performance solutions and making them affordable for high-volume manufacturing", the company should be raking it in.

But it's not.

In the year to March, Rakon made a loss of $420,000, down from a profit of $8.5 million the previous year. Revenue fell from $189m to $178m.

Meanwhile, its shares have performed like a greased pig on a hydroslide, with gravity's inexorable momentum overwhelming the porker's frantic efforts to gain height.

Until, perhaps, last Monday, when Rakon announced a deeper relationship with big Chinese telco Huawei. The shares immediately leapt as much as 20 per cent off their floor around 42c, where they had been bumping along for a couple of months.

The deal involves "a quadrupling of Rakon's sales to Huawei over the next five years to US$56m".

This rather vague statement apparently means sales will total US$56m ($69m) over the next five years.

This is not to be sneezed at by any means. Huawei is a major supplier of smartphones, as well as a whole range of infrastructure kit, and gaining more of its business is a big thing.

Craigs Investment Partners analyst Dennis Lee said after the announcement: "We think it's positive," but "without enough information on the [profit] margin it's hard to tell. In this industry, margin is very important". Lee's last research note on the company, on May 17, rated Rakon a "hold" with the price at 49c.

Although Rakon's management was bullish about its ability to benefit from explosive growth in mobile data traffic, said Lee, "we are less upbeat due to the escalating macro uncertainties".

"That said, we believe RAK should recover from the disappointing FY12 driven by restocking and the benefits flowing from the commoditisation of smartphones. RAK's new and much lower-cost T-sensing crystals should allow RAK to ride the commoditisation cycle by gaining market share."

The Huawei deal may be a sign of those benefits, even if it won't by itself produce a big lift in earnings. After attending a Rakon/Huawei post announcement function, Andrew Bascand of Harbour Asset Management, owner of about 9 per cent of Rakon, said the company's staff "were more upbeat than I have seen them for two years."

"This doesn't mean in my opinion any immediate lift in either sales or profit - but momentum will build through 2013," he said.

One of Rakon's problems is the exchange rate. Most of its business is denominated in US dollars, so the high kiwi/US rate has been a major headwind that looks likely to persist.

Another issue investors may consider is the substantial investment Rakon has made adding operations in China, Europe and India. According to its cashflow statements, in the last five years Rakon's investments total $189.5m. With cash from operations totalling just $33.6m over the same period, the company has been funding its expansion by selling shares and borrowing more money.

That pattern can't continue, so shareholders will want to see some harvest being reaped from those investments before too long. GPS has gone way beyond geeks in camouflage gear.

On Friday Rakon followed up the Huawei announcement with an "optimistic but cautious" update saying market conditions were below expectations and competition was keeping margins tight. Operating earnings this year would be $14-$16m, it said, slightly better than last but still way down on 2011's earnings of $24.8m.

The market's sensitivity to anything but good news showed in the share price, which dipped 6c to 41c.

It looks like investors won't be holding their breaths for a bonanza.

- © Fairfax NZ News

[Stranger_Danger]

An executive pay freeze sounds fantastic.

However, when the share price is 1/12th of its high, "freezing" the pay at the high level that was formerly justified by running a bigger (by market cap) company isn't really a freeze - its permanently keeping it at a high level!

It is a little like Richie McCaw or Dan Carter agreeing to "freeze" their pay, when they are 39 and injured most of the time, at the same level they were getting at the peak of their sporting power.

Everybody would see that for what it was.

I don't see a difference here.

[janner]

You are not the only one to see any difference SD. The Executives do not either :-))

[winner69]

here's a video with a guy deconstructing iphone 5 with charts of the stock prices of the companies that may have or not su[[lied bits ..... the peopel who did it are a bit stupid cause they forgot to mention Rakon
http://www.smh.com.au/technology/technology-news/apples-turn-to-be-accused-of-copying-20120922-26dl4.html

Tomorrow might be the day for the rakon sahreprice to take off when word finally gets out

[kizame]

here's a video with a guy deconstructing iphone 5 with charts of the stock prices of the companies that may have or not su[[lied bits ..... the peopel who did it are a bit stupid cause they forgot to mention Rakon
http://www.smh.com.au/technology/technology-news/apples-turn-to-be-accused-of-copying-20120922-26dl4.html

Tomorrow might be the day for the rakon sahreprice to take off when word finally gets out

Why would it take off,presumeably they had the same bits in iphone 4,3,2 and iphone,so why now?
And what about Samsung phones,I mean they seem to leed the world in smartphone unit sales,so whom supplies those chips,I presume it is Rakon,if not,then they have serious competition.

[ratkin]

Why would it take off,presumeably they had the same bits in iphone 4,3,2 and iphone,so why now?
And what about Samsung phones,I mean they seem to leed the world in smartphone unit sales,so whom supplies those chips,I presume it is Rakon,if not,then they have serious competition.


Exactly, Been a massive smartphone revolution in the last few years. yet Rakon making zilch , despite their gizmos supposedly being in thr devices.
If they havent managed to cash in yet , they unlikely to in the future

[montana]

here's a video with a guy deconstructing iphone 5 with charts of the stock prices of the companies that may have or not su[[lied bits ..... the peopel who did it are a bit stupid cause they forgot to mention Rakon
http://www.smh.com.au/technology/technology-news/apples-turn-to-be-accused-of-copying-20120922-26dl4.html

Tomorrow might be the day for the rakon sahreprice to take off when word finally gets out

LOL, Do you work for Rakon?

[Jay]

The quick look I had, they only show companies that are listed on the US shremarket??

"Rakon, who , Noo Zeeland, where's that?, is it an island off Alaska?" :confused:

[Zaphod]

To answer a question that's been posed on this thread a couple of times; Broadcom are the supplier of GPS chips in both the iPhone 4S and Samsung Galaxy S III phones.

[Zaphod]

We know they supply to Huawei, who make smartphones, but obviously not one of the big makers. I believe Rakon have supplied their kit to Motorola for in-car GPS solutions, so plausible they are in Motorola (Googlerola) phones.

I can't speak for all of the Motorola models, but I do know that Texas Instruments supplied the GPS chips for the new Droid RAZR HD and its predecessor.

You're right that Huawei are one of the smaller providers. There cellphone products are of reasonable quality and positions with a competitive price point. Huawei have used TI in many of there models of handsets, but that may change now that Rakon has an agreement with them.

Unfortunately I don't hold Rakon’s governance team in very high regard, so I'm not sure whether the partnership with Huawei will amount to anything tangible.

[mknz]

Rakon is a very interesting and complicated business with an even more complicated security resting on top of it. It seems to me that over the past few years Rakon has focused on building a stable global platform rather than on delivering maximum earnings to shareholders. While they focused on building this kind of global currency hedge, their shareholders, who understandably couldn't understand a 3 year wait for a turnaround, systematically abandoned them.

This shareholder abandonment removed 90% of shareholder value over the past 5 years and became a self-fulfilling prophesy of continuing declines as very dissatisfied shareholders fed on each other's negative emotions in posts on this website and others. This is to be expected and it is part of the emotional market cycle in all markets throughout the world.

4182

One of the strongest criticisms has been that of nepotism and incompetence within the Robinson family and that family's over-representation on Rakon's board of directors. To answer this accusation, the directors have brought two new independent directors onto the board this year. In addition they have noted the fact that those family members own 23% of the company and have a very strong desire to see improvement in the share price. The result of this announcement was the September spike in share price and the beginning of an upward trend in RAK.

It will be obvious from a look at the one year or 5 year chart that Rakon has formed a solid base at 46cps over the past month. From the annual reports it can be seen that the company has built up the kind of reputation for quality and innovation that will allow it to evolve and supply advanced communication devices well into the future. Right now Rakon has come off it's darkest days and is stable at a bargain basement price which will easily reward future long-term minded shareholders with a 500% return on investment as it returns to a price of $2/share over the next two years.

Selling RAK at this price is daft, and yet there are still willing sellers. RAK at 46cps is the opportunity of a lifetime.

---
As of this writing this thread had 107446 views

[mknz]

If they're that good, why aren't they in Apple or Samsung smartphones then? The only benefit I see to owing Rakon shares, quite frankly, is that it may one day be taken over by Huawei.

Rakon doesn't have the capacity to make enough chips for the flagship Apple and Samsung devices. look up the capacity of the chengdu facility where Rakon makes it's smart wireless devices IC's. It's in the annual reports.

[The BOWMAN]

Rakon doesn't have the capacity to make enough chips for the flagship Apple and Samsung devices. look up the capacity of the chengdu facility where Rakon makes it's smart wireless devices IC's. It's in the annual reports.

mknz, I am just wondering how Rakon could drive their profit higher. The margin in this industry is so thin that there is barely much money to be made. They could continue expanding on revenues but won't necessary increase their profits, which seems to be what is happening for the last several years. Can you elaborate what is supporting your rosy prediction?

[ratkin]

Rakon is a very interesting and complicated business with an even more complicated security resting on top of it.

Basically it is impossible for the average shareholder to price this one up. Its recent share price stability probably has more t do with rising tides and boats.
There are better, less opaque opportunities elsewhere

[mknz]

mknz, I am just wondering how Rakon could drive their profit higher. The margin in this industry is so thin that there is barely much money to be made. They could continue expanding on revenues but won't necessary increase their profits, which seems to be what is happening for the last several years. Can you elaborate what is supporting your rosy prediction?

SWD's are only one part of Rakons globally diversified product portfolio. 25% of ebitda comes from high reliability devices which have very long stable revenue cycles. Remember that Rakon makes the quality infrastructure that is required to support the mass human migration to swd's and will be reaping the high margins on 4g infrastructure for the next five years. Nevertheless, Chengdu is profitable and this will be it's first full year of operation since the facility opened. Last year's particularly bad results came partly due to the cost of building a huge, cost effective plant that could not assist rakon's bottom line. This is no longer the case and Chengdu has been fully operational for the half year ending.

In the end, Rakon is seriously oversold and past the bottom of it's market cycle. This year will hit squarely in the middle of guidance and next year 4g lte will solidly assist revenues.

[mknz]

Basically it is impossible for the average shareholder to price this one up. Its recent share price stability probably has more t do with rising tides and boats.
There are better, less opaque opportunities elsewhere

I believe you are seriously underestimating the diversity of intelligence of shareholders, a well as the technical side of every play. For now I agree the middle of the bell curve aren't seeing this, but next year they will jump on after Rakon has already appreciated to 60-90cps. Frankly, Rakon is currently priced as if it its going out of business which it its clearly not. Nobody is calling this a xro, peb, google, or appl, but with net tradable assets worth twice the current market cap its not that difficult to see value here if you look.

Another important point is that investing is a zero sum game. The "average investor" breaks even, while the top of the curve makes as much as the bottom of the curve loses.

[Balance]

SWD's are only one part of Rakons globally diversified product portfolio. 25% of ebitda comes from high reliability devices which have very long stable revenue cycles. Remember that Rakon makes the quality infrastructure that is required to support the mass human migration to swd's and will be reaping the high margins on 4g infrastructure for the next five years. Nevertheless, Chengdu is profitable and this will be it's first full year of operation since the facility opened. Last year's particularly bad results came partly due to the cost of building a huge, cost effective plant that could not assist rakon's bottom line. This is no longer the case and Chengdu has been fully operational for the half year ending.

In the end, Rakon is seriously oversold and past the bottom of it's market cycle. This year will hit squarely in the middle of guidance and next year 4g lte will solidly assist revenues.

I wish I can share some of your enthusiasm.

Rakon unfortunately has been promising a lot over the years and what comes across is that they cannot deliver because circumstances keep changing - GFC, NZ$, telecommunications industry slowdown, competition, price pressure because of over-capacity etc. Always someone's else fault and always there is an excuse.

Boil it all down is that Rakon is in a commodity business and like TVs and DVD players, prices keep going down each year.

Anyway, good luck and hope Rakon rewards your loyalty in the years ahead.

May 2011 : "Commenting on the year ahead Mr Robinson said that he expected Rakon’s overall business to continue growing during FY12."

Nov 2011 : “Our projected EBITDA for the full year remains in the NZ$14 to NZ$18 million range."

May 2012 : "Our 2012 year EBITDA of NZ$13.1 million was below our target and expectation we had when I addressed this meeting 12 months ago.
The most significant factor causing this was a slowdown in spending in the Telecommunications sector."

But there's hope :

Sept 2012 : "So while our share price and profit performance is not where we want it to be Rakon is very well placed for the future."

But then, you read this :

Sept 2011 : "We are here for the long term not the short and although the share price currently does not reflect the value potential to those of us who are owners and work for the company we remain very confident that it will." Sp then was 67 cents - it's now 46 cents.

[Hoop]

Yawn..................:sleep::sleep:
Too many undelivered promises from a company operating in a rapidly changing and deflationary environment.
Why would anyone want to put their money into RAK atm and risk not only missing the NZX Bull market exuberant rally currently in progress but incurring a possible loss to boot

http://i458.photobucket.com/albums/qq306/Hoop_1/RAK16102012.png

[mknz]

So unloved. Management has made great long term decisions at the expense of short term and I'm betting these decisions are starting to pay off. The knife has stopped falling. We'll just have to agree to disagree on this one balance.

[ratkin]

So unloved. Management has made great long term decisions at the expense of short term and I'm betting these decisions are starting to pay off. The knife has stopped falling. We'll just have to agree to disagree on this one balance.

Its down another 2.2% already today, and looking at the market depth it may soon be 4.4%

Why not just hitch a ride on something going up , there may well be a time to invest in Rakon , but now isnt looking like that time


If Rakon went on Dragons den , they would be told "you dont have a buisness. Im out!

[mknz]

Its down another 2.2% already today, and looking at the market depth it may soon be 4.4%

Why not just htch a ride on something going up , there may well be a time to invest in Rakon , but now isnt looking like that time


If Rakon went on Dragons den , they would be told "you dont have a buisness. Im out!

I think I spooked some shareholders and caused that dip. Anyway I'll be here at least until after earnings on Nov 15th or so where I expect to take profits at 64 or thereabouts. I don't care about short term price fluctuation, I've done a huge amount of homework on this one.

[Silverlight]

mknz, while I agree with your sentiment on Rakon, it is very high risk/ reward, they have been on my watch list for the past year, but I am happy to wait for some real positive news from the company before becoming a shareholder.


Another important point is that investing is a zero sum game. The "average investor" breaks even, while the top of the curve makes as much as the bottom of the curve loses.

Investing in shares however is not a zero sum game.

All global share markets over the long run have returns in excess of inflation. If share markets were a zero sum game, long term averages would be between 0% and inflation.

[Balance]

I think I spooked some shareholders and caused that dip. Anyway I'll be here at least until after earnings on Nov 15th or so where I expect to take profits at 64 or thereabouts. I don't care about short term price fluctuation, I've done a huge amount of homework on this one.

Get rid of Bryan Mogridge as a director and the sp will go back up to 50 cents immediately.

[mknz]

Investing in shares however is not a zero sum game.

All global share markets over the long run have returns in excess of inflation. If share markets were a zero sum game, long term averages would be between 0% and inflation.

Sorry, you're mostly right, investing isn't zero sum except perhaps theoretically on a long enough timeline. I misspoke myself. I meant to say trading is a zero sum game.

[Zaphod]

Rakon doesn't have the capacity to make enough chips for the flagship Apple and Samsung devices. look up the capacity of the chengdu facility where Rakon makes it's smart wireless devices IC's. It's in the annual reports.

I agree that Rakon don't have the manufacturing capacity, but they could have catered for third or perhaps second tier manufacturers and with a secured order invested back into expansion of their facilities. Unfortunately they missed the proverbial boat.

[Balance]

Forsyth Barr have just announced they are discontinuing coverage for Rakon, along with Colonial Motors and NZ Windfarms.

I don't see this is as a positive...

Forbar is trying to distance itself from the bad investment recommendation they had on Rakon for a while. They even invited Rakon to their investment day last year to present to their clients. Sp then was over $1.

Making the bad investment recommendation is life - can't get them all right. But to discontinue research is irresponsible as there are many clients of theirs now stuck in the stock?

Expect selling to come out.

[winner69]

Hey minx ....that was a good post this morning and I was going to reply ....but you have deleted it

[winner69]

Rakon is a very interesting and complicated business with an even more complicated security resting on top of it. It seems to me that over the past few years Rakon has focused on building a stable global platform rather than on delivering maximum earnings to shareholders. While they focused on building this kind of global currency hedge, their shareholders, who understandably couldn't understand a 3 year wait for a turnaround, systematically abandoned them.

This shareholder abandonment removed 90% of shareholder value over the past 5 years and became a self-fulfilling prophesy of continuing declines as very dissatisfied shareholders fed on each other's negative emotions in posts on this website and others. This is to be expected and it is part of the emotional market cycle in all markets throughout the world.

4182

One of the strongest criticisms has been that of nepotism and incompetence within the Robinson family and that family's over-representation on Rakon's board of directors. To answer this accusation, the directors have brought two new independent directors onto the board this year. In addition they have noted the fact that those family members own 23% of the company and have a very strong desire to see improvement in the share price. The result of this announcement was the September spike in share price and the beginning of an upward trend in RAK.

It will be obvious from a look at the one year or 5 year chart that Rakon has formed a solid base at 46cps over the past month. From the annual reports it can be seen that the company has built up the kind of reputation for quality and innovation that will allow it to evolve and supply advanced communication devices well into the future. Right now Rakon has come off it's darkest days and is stable at a bargain basement price which will easily reward future long-term minded shareholders with a 500% return on investment as it returns to a price of $2/share over the next two years.

Selling RAK at this price is daft, and yet there are still willing sellers. RAK at 46cps is the opportunity of a lifetime.

---
As of this writing this thread had 107446 views


Always believed this is how market emotions work ..... except RAK seems to be an exception when you plot their shareprice as an overlay. Apologies for it being a bit rough but freehand .... and i seem to have it in an uptrend as well

[janner]

Odd indeed Sparky.. !!!..

" there are still willing sellers. RAK at 46cps is the opportunity of a lifetime. "..

Where have I heard that before ???.

Your not Nigerian are you mknz ??.. Where do I send my bank account number ??..


Still able to buy at

[lowrolling]

Forsyth Barr have just announced they are discontinuing coverage for Rakon, along with Colonial Motors and NZ Windfarms.

I don't see this is as a positive...

FNZC are still covering

[mknz]

I'm so glad to be infamous. Please note that the EUR/USD has traded at 9% less than 2011 levels throughout 2012. Also note that Rakon's trading currency is USD and that the high reliability products, amounting to 25% of EBITDA, are sold in Euros.

Snapiti and Sparky are permabears who bought at the top and imagine that they can talk a decent company down to 0.00 using their hurt feelings. Just look at the long term chart and the base is obvious.

[mknz]

I just have difficulty in reconciling your comments about this being a great long term opportunity in your post on 17/10 at 11:20am about Rakon making great long term decisions, and your describing Rakon on 16/10 at 6:05pm as an opportunity of a lifetime, with your desire to take profits on the company on or after the results on November 15.

You are prepared to take profits at a price which suggests a short term spike rather than making the most of an opportunity of a lifetime based on great long term decisions by the company's management.

I'll owe you a favor if you stop saying "opportunity of a lifetime." ugg, I wish I never used that expression. I believe Rakon has turned a corner and that it should trade around 80cps for the the next year and then start to really grow after that once the EU decides on a course of action and global markets adjust to whatever the new normal is. I have an exit point because I'm not Warren Buffet and my account is small enough to move around.

[Hoop]

1. I wonder what ACC paid for them originally and,
2. What took them so long to start selling their holdings down?

I looked up the Announcements and can't see any ACC involvement at all.
AMP has been actively selling down with announcements the last couple of days.

Interesting study of AMP Capital Investors (NZ).Ltd...They hit a dud with RAK.
From the Announcement history it seems they entered into Rakon at end of July 2009 when the price was $1.40....It was as high as $5.60 2 years previous but it had been a down hill ski slope since then. it had reached 70cents in March 2009 and then rallied back up to 1.60 and formed a bearish double top and that when the announcements said AMP jumped in. It looked good until it topped 1.60 again (now a more bearish triple top) and it fell for a year until it bottomed around 85c in mid jun2010...A stroke of genius here as AMP bought 5.22M more at the bottom...and sold some at the top ...and then it happened ..another buy in at a triple top...:p
From the announcement history a rough estimate puts their investment at a unrealised loss of -$11.9M... their RAK shares would have to jump up to $1.70 to break even.
.................................................. .................................................. .................................................. .................................................. .................................................

AMP Capital Investors (NZ) Ltd. Investment into Rakon (RAK)

Disclaimer:....Rough calculation on NZX announcements...so not accurate.

Date this disclosure made: 31 July 2009
7,074,575....$1.40................................ ....$9,904,405

Date this disclosure made: 29 June 2010.....$5,222,074.....$15,126,479
13,008,751....$0.88......

Date this disclosure made: 16 December 2010.................,,,,,,,,,,,,....sold $2,158,205
11,132,051....$1.15

Date this disclosure made: 1 April 2011.......7,812,891.......$22,939,370
18,107,847....$1.12

Date this disclosure made: 4 August 2011........................................sold $1,785,465
16,187,992....$0.93

Date this disclosure made: 5 January 2012.......................................sold $961,358
14,226,036....$0.49

The sale of 1,918,560 shares between 5/01/2012..............................sold $959,280
and 15/06/2012
12,307,476.....Av $0.50

Date this disclosure made: 31 October 2012......................................Sold $1,135,433
9,604,064 ....$0.42.

Sale of 285,550 shares on 31/10/2012.............................................S old $119,931

9,318,564 remaining shares.....$0.42 ...unrealised present value $3,913,796

Amount spent into Rakon $22,939,370
Amount realised..............$ 7,119,672
Total..............................$15,819,698
Unrealised value..............$ 3,913,796
Unrealised Loss .............($11,905,902)

[Stu]

1. I wonder what ACC paid for them originally and,
2. What took them so long to start selling their holdings down?

more pertinent questions would be:
1. has anyone ever met the organ banks from ACC
2. is ACC selling a buy signal

[Stranger_Danger]

Doing the opposite of AMP is an old Ron Brierley trick.

In my experience, it has usually been profitable.

[Jaa]

Doing the opposite of AMP is an old Ron Brierley trick.

In my experience, it has usually been profitable.

AMP Capital make all their investment decisions out of Sydney nowadays so doubt they have that much special knowledge about NZ companies.

[Balance]

AMP Capital make all their investment decisions out of Sydney nowadays so doubt they have that much special knowledge about NZ companies.

In the context of managing billions of dollars, Rakon is but a little minnow and classified officially now as a non-performing bad investment for AMP.

So out it goes which means there's 9m more shares to be sold.

Even if you believe in Rakon, that's a tsunami of shares to stand up to!

My pick is that Rakon will bottom out at around 30 cents.

[Hoop]

holy smoke!!!!! finally a fundamentel and sound business decision out from RAK that does not focus just on R&D and the Robinson's ego. Looks like the new indepedent directors are doing there job.

Only problem is now we have to wait for RAK traditional crappy announcement soon after a positive one.

The market likes it too...45c up 4 (+9.8%)

[Master98]

China economy is slowing down, production cost is going up, more and more foreign manufacturing plants are moving out of china,as I said before rakon built factory in china at wrong time, even their china partner TimeMarker don’t want put more money in the new china plant, cut nz staff and shift some of production to china make sense, but can’t save this sinking boat.

[The BOWMAN]

It is a bloody disaster. I've sold out all my holdings with a big loss. Should have acted quickly years ago. They keep boasting they are the market leader. I think that is just down straight lie!

[mknz]

Hey Sparky, you win. My face is pretty smashed on this one. I wish I could say I only lost 6% on this one but I lost more than that. I got out last week at the worst possible time... right after the announcement that AMP still had 9 million shares to sell and obviously doesn't give a damn what price they get out at.

Right now I'm in cash only looking to weather the coming nz recession.

[iceman]

Hey Sparky, you win. My face is pretty smashed on this one. I wish I could say I only lost 6% on this one but I lost more than that. I got out last week at the worst possible time... right after the announcement that AMP still had 9 million shares to sell and obviously doesn't give a damn what price they get out at.

Right now I'm in cash only looking to weather the coming nz recession.

Its a shame your "huge amount of homework on this one" didn't produce as you expected. Hope you didn't use the same methodology predicting the "coming nz recession" :0

[karen1]

@ mknz, good on you for being honest! Just sorry you lost on this, but you are not, nor will be, the only one.

@ The Bowman, sorry for your loss too. Guess you have woken up to what others have been saying, same old rhetoric ad nauseum.

I had a bit of correspondence with a couple in the hierarchy of RAK over the last 18 months, the last of which convinced me to get out at a massive loss. The tenor of the last correspondence was agreement with a very disappointing sp, and all about blaming on Europe, FX, etc. And acknowledgement of disappointing results and need to improve... And of course the blurb about them being successful establishing strong positions in several key markets and gaining a very strong platform to grow the business revenue and earnings.

Same old, same old.

The latter was dated back in December last year, since which time the writer has left RAK.

The Robinsons, at least, continue to do well:

http://http://m.nbr.co.nz/article/robinsons-got-pay-rise-year-when-rakon-shares-tumbled-wb-121843

[Balance]

In the context of managing billions of dollars, Rakon is but a little minnow and classified officially now as a non-performing bad investment for AMP.

So out it goes which means there's 9m more shares to be sold.

Even if you believe in Rakon, that's a tsunami of shares to stand up to!

My pick is that Rakon will bottom out at around 30 cents.

Today's results will reinforce AMP's decision to sell down the rest of its 9m Rakon shares in a big hurry.

"Stand aside" is the recommendation I just received from a broker.

[mknz]

Its a shame your "huge amount of homework on this one" didn't produce as you expected. Hope you didn't use the same methodology predicting the "coming nz recession" :0

Everyone makes mistakes, how often you make them is what determines whether you make money or not. I got cocky and ended up with my face in the dirt. Those too things are highly correlated.

[moimoi]

Net tangible asset backing per ordinary security $ 0.82

Is that number anywhere near reality?

[iceman]

Everyone makes mistakes, how often you make them is what determines whether you make money or not. I got cocky and ended up with my face in the dirt. Those too things are highly correlated.

Absolutely correct my friend. I have ended up with my face in the dirt many times in this game, but happily continue with head above water, but only just :)

Humble apologies if any offence was taken from my post, it was not the intention

[Balance]

Falling knives and in this case, very sharp ones.

How many fingers have we all lost collectively buying on the way down and trying to pick a bottom?

[mknz]

I was the biggest bull here last month but macro conditions changed my whole view. The bernanke panic, ie QEternity is a sign of monetary desperation in the USA and from what we know of previous QE's we can see they don't work. The only positive news out of the USA is that employment is getting better due to hundreds of thousands of full time jobs being divided into multiple part time jobs due to changes in health care laws for employers. The entire EU including Germany is in recession. France just instituted 75% taxes on businesses(why wasn't this mentioned in the half year report? It's pretty significant!) China is 60%+ dependent on exports and the largest exporter in the world and global shipping prices have dropped through the floor, I'd say that's a pretty sure sign China is going to crash too.

USA, EU, China, these are the countries that RAKON is massively exposed to. When I bought into RAK I did so thinking that the global economy had bottomed, but that is obviously not the case. The last few months were just an inflection point on the path of collapse.

The arguments from some of the people on this forum are quite hard hitting. What is the value of rakon's assets? Only what the market will pay for the plant and materials in an oversupplied bear market. What would you pay for a business that is likely to lose 5% of your money each year for the next three years? What is that asset worth? Would you pay $80,000,000 for a company that is on track to lose 8 million dollars this year? Certainly not without replacing management and a plausible story for success in a caustic macro environment.

I propose that Rakon is worth 10 times what you expect the mean earnings to be over the next 3 years. My generous guess from the current macro trends is that Rakon will average 5 million after tax earnings. That values Rakon at NZD$50,000,000.

If you consider that there are 191,000,000 shares outstanding the intrinsic value of each share is .26

[Balance]

Give yourself a break, mknz.

We all get it wrong from time to time, and sometimes spectacularly.

Important though to be objective and balanced at how we look at the world - there are always winners and losers.

Nokia was king of mobile once - look at it now. Apple was almost broke once but is now #1.

Change in management and directors however is the starting point for a turnaround.

Until then, best to stand aside.

Mr Mogridge and at least one of the Robinsons have to go.

Just look at the mess at PGC - courtesy of the Chairmanship of Mogridge.

[mknz]

Rakon was started in the middle of the GFC and management didn't have a clue what was happening. They started "hedging" by diversifying globally, however in a GLOBAL financial crisis "globalization" is actually just diversification into a greater number of losing macro positions.

Oh yes, and like snapiti and balance have said, management has a now proven history of misleading shareholders.

[Anna Naum]

Rakon was started in the middle of the GFC and management didn't have a clue what was happening. They started "hedging" by diversifying globally, however in a GLOBAL financial crisis "globalization" is actually just diversification into a greater number of losing macro positions.

Oh yes, and like snapiti and balance have said, management has a now proven history of misleading shareholders.

Having attended a number of meetings with RAK management and gone to most of the AGM's it is obvious that RAK management really think that the world has just not played fair with them and it is not their fault I can assure you. These guys will never front up and while they own so much of the company the only real answer would be a takeover because they still think of the company as really just theirs.

And dont for a second think the 'reduction' in salary is anything but a deferment of debt to the family that run this puppy, the moment there is any sign of a pick up they will load up on heaps of options and front load the salary packages (with obligatory 'independent' analysis paid for by the company that shows they have been underpaid for ages and deserve every penny).

[Anna Naum]

Sparky, a great reply, with some well thought out suggestions that probably all of us should consider when investing. Printed and attached to the wall. Thanks

[Balance]

Having attended a number of meetings with RAK management and gone to most of the AGM's it is obvious that RAK management really think that the world has just not played fair with them and it is not their fault I can assure you. These guys will never front up and while they own so much of the company the only real answer would be a takeover because they still think of the company as really just theirs.

And dont for a second think the 'reduction' in salary is anything but a deferment of debt to the family that run this puppy, the moment there is any sign of a pick up they will load up on heaps of options and front load the salary packages (with obligatory 'independent' analysis paid for by the company that shows they have been underpaid for ages and deserve every penny).

Agree with you 100%.

Look at how Mr Bryan Mogridge chairs PGC, and you better get the hell out of Rakon.

Shifts PGC's AGM to Auckland (after 150 years of holding AGMs in Christchurch) to avoid irate long term shareholders.

Then, the MD did not show up because he is too busy trying to sell their last NZ asset (after fire-selling the others).

And Mr Mogridge seems to think that is all fine!

[Penfold]

can anyone explain to me why the RAK share price continue's to hold it's ground.


Its the NAV for me. Can't bring myself to part with it, when it should be a take over target.

Of course selfish and incompetent management would repel a takeover... and with margins like they have it wouldn't be at a great premium.

On reading this back, I think I will sell tomorrow.

[Balance]

I think alot of investors look at the nav, but my gut feeling is this is very misguiding, I dont know who come's up with that value but one thing is for sure if it is influenced by management or directors in RAK it is guaranteed to be misleading.



Those of us with long enough memories remember Fortex which went belly-up despite having a NAV well in excess of share price.

Likewise, TUR when the Germans made their takeover offer.

It's all about cash flow and realizability of assets if push comes to shove.

[blobbles]

Yep, I was as positive about the company as mknz a year ago... a year later I am out for only a small loss.

To me, I have no idea why the share price is stuck at around 42c. Management of the company seems to be inept, then covered up with nice words, followed by missed results, more ineptitude, followed by covering up with nice words. As others have pointed out, this has been happening for YEARS, which shows it has become a part of their culture and will be hard to change.

Like others have said. The industry this company is in is booming while their profits are sliding further and further into the red. This company is seriously under performing and they continue to make stupid decisions (why on earth they didn't currency hedge properly is beyond me) and keep blaming everyone else for their inept management. A badly managed companies share price will likely head one way and I believe it will continue to head that way rather soon.

At least they are responding to such criticism by making some sound financial decisions (moving production off shore) and management decisions (getting more independent directors), but I fail to see this having a great effect medium term. Their savings of 10m on moving their production off shore may mean that they break even next year. They need to win a lot more customers (unlike the Huawei deal which added virtually nothing onto their bottom line), make a few more management changes and produce a lot more product enhancements (hopefully backed up by IP) before I am lured back. Plus they need to actually start providing real guidance, say that they made mistakes and make themselves accountable for those mistakes by giving a number of staff members (we know who they are) dramatic cuts in their pay in direct relation to the performance of the company. If they can do all that, I will be back in. If not, we may be kissing goodbye to a NZ company who had the greatest potential.

[Balance]

Yep, I was as positive about the company as mknz a year ago... a year later I am out for only a small loss.

To me, I have no idea why the share price is stuck at around 42c. Management of the company seems to be inept, then covered up with nice words, followed by missed results, more ineptitude, followed by covering up with nice words. As others have pointed out, this has been happening for YEARS, which shows it has become a part of their culture and will be hard to change.

Like others have said. The industry this company is in is booming while their profits are sliding further and further into the red. This company is seriously under performing and they continue to make stupid decisions (why on earth they didn't currency hedge properly is beyond me) and keep blaming everyone else for their inept management. A badly managed companies share price will likely head one way and I believe it will continue to head that way rather soon.

At least they are responding to such criticism by making some sound financial decisions (moving production off shore) and management decisions (getting more independent directors), but I fail to see this having a great effect medium term. Their savings of 10m on moving their production off shore may mean that they break even next year. They need to win a lot more customers (unlike the Huawei deal which added virtually nothing onto their bottom line), make a few more management changes and produce a lot more product enhancements (hopefully backed up by IP) before I am lured back. Plus they need to actually start providing real guidance, say that they made mistakes and make themselves accountable for those mistakes by giving a number of staff members (we know who they are) dramatic cuts in their pay in direct relation to the performance of the company. If they can do all that, I will be back in. If not, we may be kissing goodbye to a NZ company who had the greatest potential.

They are NOT wrong, the market and you are.

[blobbles]

Huh? Who is not wrong? Sorry, Balance, what are you on about?

[Balance]

Huh? Who is not wrong? Sorry, Balance, what are you on about?

That's what the directors of Rakon will tell you.

[blobbles]

Oh I am with you now :), sorry slow today!

Yep, everyone else is wrong except for them. They have had numerous chances to prove they are right, but drop the ball on every one.

[Balance]

41c now. Can't be long before it closes below the 40c mark.

Sleep with a dog with fleas and you guess what happens next?

[Halebop]

Sleep with a dog with fleas and you guess what happens next?

Baby dogs?

[Balance]

Baby dogs?

That's a good new one!
Rakon still just holding onto 41 cents.

Time for Bryan "PGC/George Kerr" Mogridge to leave and take the bad stench with him.

[Hoop]

Baby dogs?

giggle ..giggle....laugh..splutter..choke...cough:pcough :p .. ...:D:t_up: Loved it

[Balance]

giggle ..giggle....laugh..splutter..choke...cough:pcough :p .. ...:D:t_up: Loved it

Notice how it's not 'puppies' but 'baby dogs'?

Only way to describe how Rakon has turned itself into a disaster.

[Dej]

They are sustaining 41c - I cant put my finger on why. Must be past faith in the company? There was a time when they were a company NZ was proud of (eg all over the news)

[ak1261]

One rescue option is to get Chinese Huawei to buy some of RAK.

[Balance]

One rescue option is to get Chinese Huawei to buy some of RAK.

Why would Hauwei want to own Rakon when it can obtain Rakon's products at cost?

Note that there's been no follow up on the big hoopla announcement nearly 4 months ago of the US$56m Huawei contract. In fact, there was deafening silence from the directors and management in their November update to shareholders.

Anyone who ever deals with the China Chinese knows that a LOI means absolutely nothing. It usually means giving the Chinese access to confidential information!

[Balance]

I see that Bryan Mogridge has been acknowledged in NBR's Shoeshine Awards of 2012.

[Balance]

I presume you mean acknowledged in the sense that he was criticised for bad and non-performance in his roles at Rakon and PGC?

But of course, STC.

And Georgie came in for special mention as well.

[lowrolling]

Downward revision of forecast... constantly disappointing

[Balance]

Downward revision of forecast... constantly disappointing

25% to 43% profit downgrade.

From $14m to $16m, down to $8m to $12m.

Delayed sales program and decline in margins!

What next? Their products are now officially acknowledged by the board and management as commodities?

Just like with all electronic products where there's ongoing price deflation and increased production and competition?

Whatever happened to that big hoopla Huawei deal?

[Balance]

I have said it before "price takers, not price makers".

http://www.sharetrader.co.nz/showthread.php?3401-RAK-Rakon&p=385412&viewfull=1#post385412

It seems a bit of gallows humour, but congrats to those who got out at 45c.

The $10m of savings is cruel hope. Bet it won't include Mogridge or any Robinsons for staff reductions. Replacing the failing management and directors would be a far better outcome than the bulk of the planned savings which, I note, are due to be implemented by April Fools Day.

Suspect the company is going to have to raise some capital soon.

Any word leaking out will see the sp down to 20 cents.

The company's position looks terminal unless something drastic is done and Mr George Mogridge will not be able to reverse the company's fortunes. Oops - I mean Bryan Kerr. No - I mean Bryan 'NBR award' winning Mogridge.

BTW - NBR awarded Mogridge's mate, George, the award of "Flash Harry Yellow Belly Tail Between The Legs" award - or something like that.

[Balance]

"Rakon sets sail to seek its fortune"

goo.gl/uwJvg (http://goo.gl/uwJvg)

So which one is with? Robinson and Mogridge?

[blobbles]

Can anyone give us a run down of their year on year forecasts vs actual for say the last 3 years? I suspect it would be rather disappointing reading for shareholders! My pick for 2013:

Estimated EBITDA = 8-14m
Actual EBITDA = -10m

[blobbles]

Article on stuff: http://www.stuff.co.nz/business/industries/8104358/Rakon-issues-profit-warning

The most pertinent sentence is the last one: "Rakon has a history of missing forecasts."

[Penfold]

Glad I cut my losses and bailed at 42c. Lesson learned. Following all the profit downgrades, my biggest fear was that the valuations of assets will turn out to be overstated as well.

I am going to apply my mind to something else out there of value... enough time (and cash) wasted with this dog.

(Upon reading this back I am clearly still bitter).

[winner69]

$8m to $12m ebitda really means less than $8m

they say 'Delayed sales program and decline in margins' but don't really say how much of then 70% of $10m in permanent savings is included but we must assume some favourable impacts this year (before all the one off costs eh)

Gap between ebitda and npat has been about 5% points ..... oh my god that means $8m to $12m ebitda is probably loss making territory (before banormals and all that)

Surely they must make a bob or two out of every chip they sell .... surely things are not that bad

[Balance]

$8m to $12m ebitda really means less than $8m

they say 'Delayed sales program and decline in margins' but don't really say how much of then 70% of $10m in permanent savings is included but we must assume some favourable impacts this year (before all the one off costs eh)

Gap between ebitda and npat has been about 5% points ..... oh my god that means $8m to $12m ebitda is probably loss making territory (before banormals and all that)

Surely they must make a bob or two out of every chip they sell .... surely things are not that bad

Any company which keeps missing forecasts must be a company in deep crisis. It means that the company cannot keep on top of its game.

What is becoming evident is that Rakon is like an old man in a young man's game - fast moving technology requiring a whole range of expertise and skills, none of which seems to reside much in the board and management.

NZ needs companies like the Rakons of this world so I hope the Board and management realises how bad the situation is, and go for a wholesale change in management and directors.

Let's see what happens.

[Balance]

Glad I cut my losses and bailed at 42c. Lesson learned. Following all the profit downgrades, my biggest fear was that the valuations of assets will turn out to be overstated as well.

I am going to apply my mind to something else out there of value... enough time (and cash) wasted with this dog.

(Upon reading this back I am clearly still bitter).

Don't be bitter. Learn from the experience.

Golden rule to follow is - don't buy a company when it is going through a downgrade cycle. It could prove terminal.

Another rule to follow is to avoid tainted directors and management.

[emearg]

"They're just normal supply chain issues."
WOW!!! That is a shocker! Clearly the wrong person is in charge of supply chain management! They should be fired and they should get somebody that can ensure delivery! Anything else is completely unacceptable!

If that is normal for Rakon there is absolutely no hope!

RAK is valued at over 70 million. On that basis the share price has a long way to fall! I suggest that unless it gets it's act together (which seems unlikely as it appears to be completely out of it's depth) the share price will be 15 cents or less by next Xmas.

[Balance]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10855386


"It's not a loss of business - it's just a delay," he said. "It's probably something to do with the austerity measures ."


You mean you don't know for certain why the revenue dropped? Europe could be in austerity for 5 years, which means they might not get their money for years....


[I]Robinson said he was surprised by how far Rakon's share price had fallen yesterday."It's dropped a lot more than I expected it to."

Ferkrysaiks....let investors worry about the share price. You worry about the business, which given that you are management and a director, is troubling that you also have "normal supply chain issues".

Normal for Rakon perhaps.

Delay means competitors can move into the space in a fast moving technological sector.

One senses that Bryan Mogridge is trying to apply some of his expertise in the wine industry in other fields, PGC = financial and Rakon = techonolgy, and falling flat on his face.

Time to go back to juicing the grapes, Bryan and let a real Chairman take over.

Until then, no point being in this company. It smells too much like PGC - the stench is almost unbearable.

[blobbles]

Latest report seems to be full of the same old stuff.

Lots of talk about growth, but they have just managed to equal revenue levels for 2008. In 5 years in being a high growth industry, they only able to make the same revenues, while dramatically increasing their costs.
Lots of talk about being in a great position to take advantage of the growth, but no results - i.e. they aren't actually gaining any $$ from the growth they claim to be part of.
Lots of blaming the $$ without talk of currency hedging.
New products! Claims that it will make them more of a one-stop-shop. No evidence of any such thing.
New products! Claims of higher margins built in, but as a price taker, who is really listening.

Looking at the financials - a $4 mill loss for 6 months. Where's all the profits from the realignment and growth you are trumpeting??? Worse result than the prior 6 months, looking on track for a financial year loss of $ 8 mill. While the company claims to be doing things to reverse its continually bad results, I really don't think they are.

All in all... I would still escape while I could at 37 cents! My pick is the SP will trend down to around 25c this year unless they can pull some rabbits out of the hat. Either that or most of the board is changed, which I would see as a big positive for the SP.

The worst sentence: "Reiterating the full year guidance given to the market in August, the current prospects and orders being received continue to indicate that Rakon should achieve a result within the predicted range." And as you have missed guidance by a long long way, many many times, why should we believe you? No confidence.

[Master98]

My prediction is that RAK will be taken over this year ... Or maybe next at the latest!

unlikely,I think Robson family still a majority shareholder unless they agreed.

[Under Surveillance]

My prediction is that RAK will be taken over this year ... Or maybe next at the latest!

You’re on to it, Belgarion.


Word is about that several would-be buyers have been sniffing around this dog, but the Robinsons and Mogridge have sent all but one of them packing.


The one being given time of day is said to be a syndicate of Nigerian and Russian origins, which the RAK elite is apparently strongly attracted to after being exposed to the bare bones of a possible full takeover offer. In prospect is a 1:1 exchange of scrip, with RAK shareholders getting one unit in the syndicate’s fund per share held. The fund trades on one of the alternative boards on the Slovenian exchange. Early indications from the syndicate are that the offer will value each RAK share at around 215 cents at stable exchange rates.


The fund has shown spectacular price growth per unit over the last 3 months, albeit on small turnover. The fund has glittering assets, including a large stake in King Solomon’s mines. It has a highly-profitable wealth management extraction unit specialising in unclaimed international inheritances and lottery prizes. One the Russian front, the fund holds invaluable letters of intent related to an impending PPP (Putin Private Partnership) covering a chain of gulags. Elements of each gulag are to be converted to 5 star resorts to tap into the elite end of western and asian tourist interest in the Pussy Riot phenomenon whilst PR members and followers are on location to add authenticity to the visitor experience. The fund has also been spectacularly successful with seed capital investments in cutting edge technologies; one of these is based in NZ and involves collaboration with blue chip companies MAD and PGC in developing a perpetual battery, with top end components from RAK incorporated, to assist the relocation overseas of Torchlight Fund No 1. There’s also a whisper that the fund is well in with a Chinese entrepreneur named Hooey Why (? sp) whom RAK is courting in the hope of extracting itself from redundant product.

The Robinsons and Mogridge are enthused by fulsome approvals of the impending offer from expert consultants, including David Ross as to the value of the mines, Mark Hotchin on the Russian real estate, and Rod Petricovich and George Kerr on the wealth management extraction business. They are also buoyed by a likely side deal whereby they retain their directorships and executive roles indefinitely, along with all perks, including the 7 series BMW with the RAKON plates, without having to shift from NZ.


There are, apparently, still a couple of sticking points in the way of the RAK board unanimously supporting the offer in principle. One is that Mogridge wants a cash component to on top of the 1:1 exchange of scrip, of at least 2 cents a share. Mogridge wants to channel this to RAK shareholders by means of a special part-imputed dividend to be paid immediately before the takeover is effected. The Robinsons consider this a masterstroke, as it will help stop longstanding shareholders bemoaning that RAK never paid a dividend, and will make practical use of the imputation account.


Another sticky item is that the Robinsons, supported by Mogridge, want a side deal whereby existing board members get extra scrip for facilitation of the early relocation of the research unit and intellectual property to Minsk and/or Abuja.


Also yet to be agreed is Brent Robinson’s request that the offer documents from the syndicate declare that the offer would not have proceeded but for the syndicate’s admiration of the business excellence of Brent Robinson, excellence recognised by his Kiwi peers making him a finalist in the internationally-esteemed NZ Entrepreneur of the Year Award 2012, sponsored by Ernst and Young.

[Stranger_Danger]

Hahahaha. Excellent effort.

[Balance]

Sensational!

[golden city]

RAK is my nightmare..., i bought it in 99c.., just woke up and see it down to 76c..after the downgraded., i was glad i sold it at 76c, loss 70k., luck i bought in cvt ..has double my investment., so break even in the year...

[Balance]

Golden City - count yourself lucky to have sold out at 76c. It is now half that.

I am beginning to wonder at what point does Rakon look attractive as an investment? Are they so stuffed that they can't recover under Clan Robinson? Is there a price that represents Rakon de-risked?

The share price suggests a market cap of $70.6m

Yet if you consider page 6 of their 2012 annual report, it suggests total equity of $194m. That should represent a share price of $1.01 a share.

Now, if I switch the BS detector on, and make some big changes:

- report inventory at $25m firesale value instead of $49m
- report property and plant at $75m instead of $90m
- report intangibles at zero (no goodwill) instead of $31m

Then total equity becomes $124m instead of 194m with the $70m writedown I've made.

$124m / 191m shares = 65c

What am I missing?

You are doing a liquidation scenario - in which case, inventory would be lucky to fetch $10m and special purpose plant and property would be worth all of $30m max.

Rakon is in a fast moving industry where the big boys have moved in. Game over.

[Balance]

Yeah, but are they well and truly screwed, or are they just stagnating?

I ask this, putting aside the jokes and jibes about Mogridge etc, because if we take into account your more brutal assessment on what inventory and plant are worth, then they are worth $64m, or on a per share basis, $64/191m shares = 33.5cps

They are getting very close to that (currently 37c), in which case they represent an investment with little downside risk meaning

- someone buying in at 33.5cps will probably get most of their money back if RAK goes into receivership
- someone who reckons they can run it better can swoop in at a very cheap price

Rakon might be a lousily run company over the last few years, but as a share, is it near enough to de-risked?

I have learnt the hard way over the decades to leave dogs alone.

They are poorly fed, ill-tempered and liable to take a chunk off you at any time.

Rakon to me is one sick dog but with the potential to give you one last nasty bite.

As for Mogridge, I think he has squandered all the credibility and goodwill he built up over the 90s with CIL and Montana - selling his name to the likes of George Kerr etc.

[Grimy]

I have learnt the hard way over the decades to leave dogs alone.

They are poorly fed, ill-tempered and liable to take a chunk off you at any time.

Rakon to me is one sick dog but with the potential to give you one last nasty bite.

As for Mogridge, I think he has squandered all the credibility and goodwill he built up over the 90s with CIL and Montana - selling his name to the likes of George Kerr etc.

Ah yes, I bought into BIO. Product, demand, big talking. Lost the lot. The lowest a stock can go is zero-not some calculated sp.........

[lowrolling]

Rakon might be a lousily run company over the last few years, but as a share, is it near enough to de-risked?

Is this the same case for BLT?

[Master98]

RAK is not like BLT where they actually own land, plant and have other things with liquidation value. I doubt RAK will go to zero in price, though I agree it is theoretically possible they could.

I believe RAK has a price where it no longer represents a real risk to shareholders. I don't believe that price has been reached. And if I was to hazard what that price is, I would suggest 30c based on valuing inventory at $10m rather than $49m, no goodwill, and the land being worth a quarter of $90m property value listed (the land is worth something even if the specialist factories are not).


You said Rakon own land, as I know in china they only own part of the factory not land, in NZ all building owned by Robson family and leased back to Rakon, I don't know the part of indian and Europe.

[Master98]

master98 you uncover another reason why it is in the robinson's family best interest to keep RAK investors interested in this dog company RENT!!!!!!!!!!!!!! for the property they own and lease to this dog company they run.
Seems to me the only one's benefiting from this company are the one's making the poor shareholder wealth decesions.

That's I said before Robson family won't let another party to T/O this company, they treat Rakon as their MONEY TREE.

[blobbles]

I take a rather dim view of Rakons asset backing. For one, I suspect their rather highly specialised crystal oscillator fabrication machines aren't worth that much on the open market - things are really only worth what others would pay for them and the market for such specialised machinery must be rather small. I suspect if Rakon were to go belly up, the purchase of their machinery would be fire sale prices as well. In China, they don't own the land they sit on as its impossible to own land in China. They lease it from the government and only own the improvements. In the case of them wanting to sell the Chinese equipment, the same would apply as I have said. Which means the only value is the concrete walls and roof. In China, the building would be knocked down, the steel extracted and the rest potentially recycled or dumped. Essentially the Chinese site I consider to be of near enough to zero value (I live in China and know how they work). They could potentially sell their lease and factory to someone else, but in China its pretty much just as cheap to build a new place to fit your needs exactly rather than modify someone elses place. I have been to the area around Chengdu where the Foxconn and Rakon is located - there is a lot of spare land there that is not yet leased, so I would expect that anyone new coming to the area would build their own, not use someone elses.

Now the revelation they don't own the land in NZ.

In all seriousness, I wonder what their actual asset backing is? It sure as hell ain't 190 odd million...

And why on earth are they holding $45 million of inventory?? That's 1/4 of a years work... no JIT management going on there...

[emearg]

no JIT management going on there...

More a case of GIT management it seems (sorry but I couldn't resist)

[winner69]

Lease payments on various properties to Trident (Robinsons) were $579,000 last year according to the Notes in AR

[blobbles]

So not only are the Robinsons making massive salaries at Rakon at a time when the company is losing money due to their bad management, they are also getting 580k in rent from the company. Could someone work out the combined total the Robinsons receive? I remember reading their salaries were something like 800k or something ridiculous (I could be wrong, don't quote me!).

My god. What a mess.

My "sell" signal for this company has suddenly turned into a "run screaming before its too late, take whatever you can get!". Suddenly Snapiti's comments aren't so extreme :-)

If it goes down, I pick $50 million returned to investors maximum via receivers. $40 million depending on receivers fees.

[winner69]

this from the AR .... you can look it up and work out how much they could be making or losing from their shares

[moimoi]

Also to be noted : According to the 2012AR ... The NZD 40M revolving cash advance facility has an expiry date of November 2013.

[blobbles]

Cheers winner, right, so according to that, no matter the share price, the Robinson family directly rakes in nearly $2.2 million a year while Rakon is operating.

I smell a cash cow.

[blobbles]

Just noticed in their HY financials they state their share capital is $173,846. That must burn the eyes for every initial investor when they see the current capitalisation of the company.

Inventory level is $53 million... I take it that is most likely completed products waiting to be shipped? If they are holding $53 million of raw goods, that seems a bit ridiculous. They are holding almost as much inventory as the capitalisation of the company. Actually this figure in total is quite ridiculous, if I was at a shareholder meeting I would ask them to go in-depth on this. I know their goods are small, but $53 million must be a half a warehouse full at the price they are selling 'em.

One interesting quote from their HY 2013 financials:

"743,289 unpaid ordinary shares were on issue and held in trust on behalf of participants in the Rakon Share Plan (31 March 2012: 743,289, 30 September 2011: 743,289);"

So no Rakon employees are interested in buying Rakon shares for at least 6 months from September 11 last year to March 12. Interesting.

They also report a rather large amount of goodwill. Hopefully companies will donate money to Rakon if they go into receivership to make their $25 million of goodwill a reality. Uhhh... don't hold your breath.

Should we rename this thread to "Rakon bagging"?

[blobbles]

A quick google search found:

http://www.macroaxis.com/invest/ratio/RAK.NZ--Probability_Of_Bankruptcy

Roughly double the probability of similar tech companies. Hmmmm...

[Blendy]

ahhh sigh, i guess it's time (actually well past time) to grin and bear it and cut my losses on this one.

[winner69]

no posts on rak today .... what's wrong with you all

shareprice 1 cent closer to snapiti's target i notice

[emearg]

STC...have you looked at Wellington Drive? If you are looking to invest in a stock that has possibly been de-risked that might be a better choice and much more likely to be a takeover target in my opinion. They have replaced the management and appear to be improving. And with a market cap of only 13 million they look cheap. There chances of making a success of it seem better than Rakon too in my opinion. They have much in common really e.g. both price takers despite their 'leading edge tech'. I have been looking at both these stocks recently and Rakon doesn't shine at all, but Wellington Drive looks like it might be worth a few bucks invested into it. Any thoughts?

[CJ]

Even if the Robinson wanted to sell DO THEY HAVE ANYTHING TO SELLDo they have any patents. YOu just have to look at the recently failed former tech companies that are being bought purely for their Patents. I assume RAK, if they had any would be in the right area for the Apple/Google/Samsung patent wars over mobile phones.

If they have no patents, then they are just a manufacturing company.

[lazylarry]

I think you have all got it wrong. The total assets of RAK are valued at 90c.
At the current price of 37c, it is trading well over 50% below what it's worth. If you take into account future potential, then it's worth well over $1.
I have recently purchased 80,000 shares @ 37c and expect my investment to double within the next 2yrs.
Extremely excited about this!

[winner69]

I think you have all got it wrong. The total assets of RAK are valued at 90c.
At the current price of 37c, it is trading well over 50% below what it's worth. If you take into account future potential, then it's worth well over $1.
I have recently purchased 80,000 shares @ 37c and expect my investment to double within the next 2yrs.
Extremely excited about this!

59% below asset backing or what it is worth

Could be right n there larry ....market doesn't always get it eh

[winner69]

What happened to new year resolutions about being nice to people ...Esp those who you think are stupid

Hope larry has the last laugh

[blobbles]

I think you have all got it wrong. The total assets of RAK are valued at 90c.
At the current price of 37c, it is trading well over 50% below what it's worth. If you take into account future potential, then it's worth well over $1.
I have recently purchased 80,000 shares @ 37c and expect my investment to double within the next 2yrs.
Extremely excited about this!

I was also extremely excited when I first invested in them, thinking the market has got these guys all wrong!

But after a couple of years of really, really, really missing targets... some terrible management decisions that aren't learnt from, downward spiralling profits (which are now turning into sizeable losses) in a market that is rapidly growing, more investigations revealing that the company (as long as it operates) gives its majority owners 2.2 million per year while the other shareholders get nothing (read "cash cow")... I realised the market was right.

25c might be generous for them.

Until them make some serious changes, can create something that competitors can't mass produce for less (i.e. actually get some IP), can get into the consumer items that are actually growing, can win some much larger clients paying a higher cost for their goods... until then RAK isn't worth your money and I would advise not investing in them. There are other potentially well managed companies out there with IP in place in higher margin businesses that make a lot more sense. Look at PEB if you want a home grown product with huge potential. Remember that you want to invest in a company that can actually make a profit, not one who only makes a profit if xyz conditions happen.

Remember lazylarry that companies with the best potential can fail if they are not managed effectively.

[skydog]

I think you have all got it wrong. The total assets of RAK are valued at 90c.
At the current price of 37c, it is trading well over 50% below what it's worth. If you take into account future potential, then it's worth well over $1.
I have recently purchased 80,000 shares @ 37c and expect my investment to double within the next 2yrs.
Extremely excited about this!


I look forward to reading Snapiti's response!

I do hold a small amount, but I'm so dizzy with all the spin thrown at me, I might as well stay on the merry go round and travel with this circus.

[emearg]

Very informative and (generally) constructive thread this one. I was thinking about Rakon as a potential recovery story but have realised that was just a dream. As they say on Dragons Den "I'm out"

[emearg]

How low do we think RAK be a turnaround (might) be posted due to a take over or the shift to China and Huawei contract? I'm betting 30 cents is as low as it will go.

I have one of these new Chinese phones and man it is FAST, as well as being much cheaper than any other mainstream brands we have in telco stores here. I think we are seeing a time were Chinese manufacturers can make high-end goods with a flooding of the market one day, just as the Japanese managed to take over the car industry in the 80s and 90s.

What role RAK will play in this, who knows. Lots of potential IMO, but management really has to get it's game face on soon...

Disclosure - Not holding RAK, but I did for about a month last year. It was a sad month. Took food out of my mouth. My hungry, hungry mouth. Never again!

I can't see a takeover in their future.

Hopefully the shift to China allows them to make some money.

The Huawei contract? What is that about exactly? Nobody seems to know and it hasn't produced anything worth while so far so I'm not holding my breath.

I'm tending to agree with some others on here that Rakon don't have the capability or motivation to get their game face on. They are doing okay out of Rakon as it stands. Perhaps they all work part time? Couple of hours a month? Sitting around the board table talking crap and rubbing each others feet while eating Tim Tams and sipping Chardonnay. A nice lark for those who can get it...

[emearg]

I'm not sure about the Tim Tam and Chardonnay thing but I am getting my free flowing BS frame of mind right for my interview at Rakon later :)

[winner69]

Once graeme gets involved in the sales and marketing she'll be right

[lazylarry]

Jeez, not even Rakon's worst detractors would think it was worth less than a buck.

Oh - you mean 90c a share? :cool:

I made a number of assumptions about Rakon's value in post 995.

http://www.sharetrader.co.nz/showthread.php?3401-RAK-Rakon&p=389352&viewfull=1#post389352

However, in subsequent posts, a number of Sharetrader members pointed out that liquidation costs for specialised plant and also for inventory would be slashed well below market price.

Assuming they are correct (and I suspect they are), then Rakon's liquidation price per share is around 25c.

Good luck with your investment, but I hope the "extremely excited" doesn't mean you are euphoric.

Thank you, your thoughts are very much appreciated Sparky.
I will be euphoric when RAK reaches 10c per share. I am willing to average down all the way.
Oh I wish RAK was worth 90c altogether, then all I'd need to do is make my way to the head office in Mt Wellington and takeover the entire business with a single $1 coin.

[lazylarry]

I love clown's, but as I do not own a circus( or hold share's in any) I just don't wont any working for me.
I believe if you own a shareholding in a company the management should be working for you. The Robinson's obviously do not share this view.
Please can anyone support RAK value of 90 cps with fact.
It is not often you see a company trading at a third of it's net asset value.
Too good to be true, must be a bargain, I dont think so.

From the chairman's annual meeting speech.
"As investors it is over to you to form your own views as to the company’s long term value but today’s starting point of 44 cents per share is half the company’s net tangible asset value - in other words selling for half price. "

So this says RAK is worth 88c, the charman says so.
I believe with the recent Chinese operations, we can safely bump this value up to 90c or even more.

[lazylarry]

lazzylarry good luck with your investment in maintaining the Robinson family lifestyles.
With your blinded excitement you have missed two investment points.
As warren buffet would say you are investing in the people (good management) this company doe's not have good management ( that's a proven fact).
You are hoping the unaudited value (which RAK management put their own value's on nearly everything) is a true reflection of the fair value of RAK asset's.
I am confident that if you follow the recent post's that is is clear that the company does not hold assets anything like 90 cps more like 15 cents.
If you spot any asset's listed in their finacial reporting that support 90 cps please post it.
LOL yep circus is right and the ring master's are still making a **** load of money.
Only thing is what does that make you as a shareholder being involved in this circus, you are not a spectator as I am with no shareholding, I hate to say it but you might be considered a clown or even worse a Robinson puppet or maybe one of their brain washed monkey's.
No offence intended.
Don't forget those investors that bought the share's at $4-$5 were very excited about the companies prospects too.

Thank you snapti, appreciate your honesty.
The net tangible asset backing per security is 85c according to the FY 2012 results
http://www.findata.co.nz/Markets/NZX/58711/FLLYR_RAK_Rakon_Limited_31_March_2012_FY_Results.h tm

OK so I may have misread it. 85c instead of 90c.

I believe with the recent chinese operations, it will rise to 90c.
We need to be patient here, they need another 2 years before they can reap the benefits of the chinese operation.

[Balance]

Thank you snapti, appreciate your honesty.
The net tangible asset backing per security is 85c according to the FY 2012 results
http://www.findata.co.nz/Markets/NZX/58711/FLLYR_RAK_Rakon_Limited_31_March_2012_FY_Results.h tm

OK so I may have misread it. 85c instead of 90c.

I believe with the recent chinese operations, it will rise to 90c.
We need to be patient here, they need another 2 years before they can reap the benefits of the chinese operation.

That's what Fletcher Building said about their China Steel operations - patience and yet, more patience.

Then, they wrote it off and sold it to the Chinese for exactly US$1.

$150m write-off.

Companies like Apple use Chinese companies to manufacture for them - that's the smart way.

[Balance]

So why doesn't anyone believe him - since his speech, the share has gone down another 20%!

Also remember, not many people like Bryan Mogridge these days, his record is very spotty.

.

Look at his track record - a complete stuff up with PGC where he showed he had little idea of how to run a public company with majority shareholders - like Georgie Porgie Kerr and obviously, with Rakon.

[Balance]

To put this downgrade in perspective - in August 2012, directors expected EBITDA to be $14m to $16m.

Now, 6 months later, it's $5m to $7m!

Do the downgrades suggest that directors have a handle on what's happening with their business?

Something has to be done before Rakon become Ra-Gone.

Robinson Gone is better than Ra-Gone.

[janner]

08:57am

SNAP !!!!.. But was it loud enough to wake lazylarry up from his dreams ??

[emearg]

So then - 30c today? Lower? It was 38c at close yesterday.

But why would you buy it at 30 cents? Or 20 cents? It seems to me that this company is slowly winding down...

[Hoop]

There is a strong rock bottom support at 36 both chartwise and depthwise...This announcement may be seen as not too bad if Mr Market had already factored in something worse
I expect 36 at opening

[Hoop]

There is a strong rock bottom support at 36 both chartwise and depthwise...This announcement may be seen as not too bad if Mr Market had already factored in something worse
I expect 36 at opening
1 minute to go primary support broken bad news now 32c?

[Hoop]

The old saying is "fools trade in the morning, pros trade in the afternoon". It will be curious to see what happens over the day.

The dead cat bounce...eh

[GR8DAY]

.......dont think so Hoop, I suspect the dead cat will now get buried!

[GR8DAY]

.....dont think so Hoop.......the dead Cat now gets buried!

[GR8DAY]

....OOPS, buried it twice now!

[Hoop]

.....dont think so Hoop.......the dead Cat now gets buried!
Yeah perhaps
Dead cat bounce event only occurs with a steep drop usually past a strong support. Rak gapped down through its floor (primary support) so its falling within a dark abyss with no visible supports (opposite to blue skies) the bigger the drop the more likely a dead cat bounce.....then the next fall and so on.
I'm sniffing around this morning looking for a freefalling cat :D

[Hoop]

Hoop really, as stated in past posta the market had over valued RAK, this was before this announcement,

I think you need to see a shrink.

probably :D

[GR8DAY]

...."pleased Im not a Kennedy" ( sorry I mean Robinson)............as the song goes

[GR8DAY]

...you'd wanna be brave or foolish SNAPITI........cant see anything in it myself, look at the sellers piling up??

[Hoop]

yep Hoop your right this stock has many supporters and thier will be a dead cat bounce, but at what level will it bounce off. Quick trade if you get it right

Yeah...picking the reversal is the tricky part......
Seems a slight support forming at 27/28...but still too much resistance 29 and above and you have that dammed 30 a rounded number psychological point..bugger!

[Hoop]

...you'd wanna be brave or foolish SNAPITI........cant see anything in it myself, look at the sellers piling up??

yep conditions not right ...yet

[winner69]

Quote - The Balance Sheet of Rakon has been the subject of extensive review over past months and even though strong (Net Assets of $189m & Net Tangible Assets of $0.80 per share, as at 30-Sep-12), will be the subject of actions to ensure it is properly aligned to a future for Rakon that allows the Company to profit from its strengths.


Suppose that is one saying that NTA of 80 cents is a load of crap and that we will doing some massive writedowns ............. non cash of course so won't affect EBITDA ..... she'll be right

[moimoi]

""The Balance Sheet of Rakon has been the subject of extensive review over past months and even though strong (Net Assets of $189m & Net Tangible Assets of
$0.80 per share, as at 30-Sep-12), will be the subject of actions to ensure it is properly aligned to a future for Rakon that allows the Company to profit from its strengths.""

Could someone with a better grasp of English please decipher the above statement please...?

Is this statement supposed to suggest 1) a capital raise to pay off debt and 2) a write down of asset carrying values.....?

[emearg]

Quote - The Balance Sheet of Rakon has been the subject of extensive review over past months and even though strong (Net Assets of $189m & Net Tangible Assets of $0.80 per share, as at 30-Sep-12), will be the subject of actions to ensure it is properly aligned to a future for Rakon that allows the Company to profit from its strengths.


Suppose that is one saying that NTA of 80 cents is a load of crap and that we will doing some massive writedowns ............. non cash of course so won't affect EBITDA ..... she'll be right

I wonder how severe the write down will be? What are their motives? Perhaps they live in a dream where they actually do think they can make a go of this? If that is the case they will cut big and try and drive the share price down and take the company private again. Lots of other possibilities too. None of them, that I can think of, are good for other shareholders...

[stevo1]

25 cents looks like it's as low as it's going to go. Wouldn't be surprised if they now halve their NTA.

I hope the Robinsons lose their shirts like most of the punters on this stock and don't get away with their criminal management style...

They wont it will just be the mug "mum and dad" investors that get fleeced.All the directors should hang their heads in shame and contemplate returning their salaries (yea right) as a penance. Robinsons and mates taking it private for peanuts is most likely outcome

[emearg]

Market cap of 50 million. This one has a long way down still to go!

[Huskeez]

Wow....... :0

[Hoop]

This company has really got the trots...anyone buying at these levels...

Yep...:D


27cps for quick trade sell 29 -30

Yer on to it :)

Nice floor forming at 24/25

[blobbles]

Holy moly, just woke up in China (spring festival, not my normal wake up time!) to see it down 11c. The announcement from Rakon has crap written all over it.

To paraphrase:

1. We are definitely price takers and our customers just told us the new price for our products. Its lower than before.
2. We either screwed up our currency hedging (once again) and/or have no idea how to manage our company so have halved our expected profits in 6 months.
3. We have been guessing (read overestimating) the value of our assets for the past few years and someone of importance wants to know what the actual value is.

I just feel sorry for the guy about 6 pages ago that thought we had it wrong. Can't say we didn't warn him...

So what is true asset value? We should have a mini comp here to guess. I will start at 25m.

[emearg]

MOOSIE 900 I dont think the robinson family will be to bad off even when RAK go belly up.
They have been paying themselve's a bloody fortune to run this company into the ground.
From my memory B. Robinson is the 14th highest paid ceo of any company listed on the nzx.

Various finance companies will be scrapping to get him as their new CEO once Rakon vanishes. They like men with his talents...

[Under Surveillance]

Various finance companies will be scrapping to get him as their new CEO once Rakon vanishes. They like men with his talents...

Don't forget that he was also a finalist in last year's Entrepreneur of the Year award, sponsored by Ernst and Young. That high accolade will surely add greatly to his attractiveness to all comers.

[blobbles]

We calculated a few pages back the Robinsins (mispelled correctly) make 2.2 million every year Rakon is in business... I would suggest they have been aware and preparing for the companies downfall for a while.

[Toasty]

Some Rakon jokes.



I wish this had some sort of thumbs up or rating function. Excellent.

[winner69]

7 million shares traded so far today, definitely a record for the company equalling 4% of shares on issue. A sorry record at that.

What %age is that of shares the robinsons don't own ......methinks quite high

[emearg]

I'm a clown. It's my job to make you laugh!

Unlike the Robinsons you deserve to keep your job :t_up:

[Master98]

whole company rotted from low level to high level management.

[moimoi]

From the last Downgrade issued in December...

Robinson said he was surprised by how far Rakon's share price had fallen yesterday."It's dropped a lot more than I expected it to."

I'll look forward to tomorrows quote...I'm picking something along the lines of "I kicked the cat".

[emearg]

God it really is incredibly sad the way this one has gone!!! I had hopes back in the day that Rakon would become NZ's Nokia.

It never got there. It never will.

I'm glad I never bought any. And no matter how cheap they get I won't be buying any.

What a pity...

[Balance]

God it really is incredibly sad the way this one has gone!!! I had hopes back in the day that Rakon would become NZ's Nokia.

It never got there. It never will.

I'm glad I never bought any. And no matter how cheap they get I won't be buying any.

What a pity...

It is incredibly sad.

Rakon has not been able to capitalize on the lead it had in the market and made one strategic error too many.

Someone should have told them NOT to open up a factory in China. BIG BIG mistake.

[Hoop]

From memory, the Robinsons "control" (but may not necessarily own) 58%.

So roughly 42%, meaning 10% of the free float got traded.

I wonder which institutions are still in?

Me http://emoticoner.com/files/emoticons/smiley_faces/insane-smiley-face.gif?1302011381 + all the Mental Institutions

[moimoi]

A worrying aspect of todays announcement is that the Smart Wireless Device division, supposedly only 30% of sales, has been labelled, via the announcement, as the reason for a reduction in the upper range of the forecast EBITDA of $12m to $7m. (practically halved) This indirectly doesn't seem to say much for the prospects of profitability of the other 70% of sales.?

Most posters seem to have concluded from the last paragraph of the announcement that Asset values are to be written down (Note to FMA: Why doesn't the announcement say what the intention is in plain english then??....Hello!!! Are all investors supposed to be able to decipher that rubbish... "subject of actions"...as an aside does your average Kiwisaver investor trying to keep abreast of sharemarket movements have any comprehension of what "subject of actions" means??). The only conclusion is that currently, he or she is not expected to.

The company needs to come out tomorrow and explain exactly how it is "compliant with its bank covenants".

When was the last time a $70M odd market cap NZX company collapsed by 31.6% in a day.??

On the flipside...did it look like few got gently soaked up in the last 30 minutes of trade @ 0.26?

[moimoi]

Thanks for your view Sparky.

[Balance]

What I take from it is that they have problems with funding that they themselves are not able to fix, and do not know when they will be fixed. Their destiny is in the hands of others, presumably bankers.

Rakon have completely screwed up their announcement. With such a wan*y statement, they breed fear and uncertainty. It would have been better to take all their medicine all at once, and leave the market in no doubt as to the challenges they face. They should have said:

1. In order to maintain our banking funding lines we have re-valued our assets, and have marked down our goodwill and significant fixed assets to take a safe-harbour approach
2. The banks support our approach and back Rakon
3. We are looking for a strategic partner to assist Rakon roll out its next generation of technology
4. We have heard concerns over our board and management, and are undertaking to refresh the board.

then maybe the market wouldn't have overreacted. But as it stands now - people don't trust the future of Rakon because they suspect (rightly) bad news is still to come. Remember when Pumpkin Patch announced the bad news that they were closing their UK and US stores and marking down big losses? The share price rose - on bad news - because people saw the plan to turn the company around and the hard decisions needed.

The part about "profit from our strengths" is intriguing. I wonder if they are looking to license technology rather than make it and sell it?

You are assuming that the market is wrong and has over-reacted?

Same thing could have been said about Feltex on the way down!

[iceman]

You are assuming that the market is wrong and has over-reacted?

Same thing could have been said about Feltex on the way down!

Welcome back from the beach Balance

[Balance]

Capital raising on the way - that's my interpretation of Rakon's last paragraph.

The references to 'balance sheet', 'even though strong' and ' actions' are all PR written to disguise the need for capital imo.

That is why the market reacted so savagely yesterday.

Net cash was down to $3.95m as at 30 Sep 2012 while bank debt stood at $32.9m. Rakon increased borrowings by $13.5m the year prior.

Now a full year loss is forecast so Rakon will need to either borrow more or raise capital.

Enough to make Rakon's bankers spew into their cuppa in the mornings!

"The Balance Sheet of Rakon has been the subject of extensive review over past
months and even though strong (Net Assets of $189m & Net Tangible Assets of
$0.80 per share, as at 30-Sep-12), will be the subject of actions to ensure
it is properly aligned to a future for Rakon that allows the Company to
profit from its strengths."

[lambton]

Thanks guys. Having been out of the NZ market for quite a while, I dallied with the idea of investing against the flow. But reading your comments and reviewing past performance no way. Woof woof me thinks.

[Balance]

How the RAK story will play out (18-24 month timeline):

- SP settles down to the 25-26 cents range
- "We need more capital": Capital raising of $20 million at discount to range, say 20 cents
- SP immediately goes to 20 cents
- Moving of plant to China costs more than expected, ends up bombing
- Report released saying cost savings did not work, company still losing money every quarter
- Customers continue to dry up, SP reaches 10 cents
- Company drowning in red, Robinsons sell up shop to private bidder at 5 cents and go live in Bermuda for the rest of their days as the FMA is on to them and every Kiwi would like to lynch them. Private bidder buys out 90% of shares on issue at 5 cents, company disbanded and sold for scrap.

Sorry to say, but this scenario is more likely than not. Going to be fun to watch the company implode from the sidelines!

My prediction : $30m to be raised to get bankers comfortable.

Rights issue - 3 for 2 at 10 cents per share.

[Balance]

That's some huge dilution right there.

Only way to get underwriters to commit.
Unless the Robinsons decide to underwrite to show their confidence?

[Silverlight]

Robinson said he was surprised by how far Rakon's share price had fallen yesterday."It's dropped a lot more than I expected it to."

Watch what people do say not what they say. Where was director interest notice after this fall showing the directors putting their money where there mouth is?


Remember when Pumpkin Patch announced the bad news that they were closing their UK and US stores and marking down big losses? The share price rose - on bad news - because people saw the plan to turn the company around and the hard decisions needed.

This was also the case where the directors were buying... constantly. PPL directors backed up their words with actions, and put their own money on the line.

[Silverlight]

I have watched Rakon for the past 3 years, waiting for an opportunity to buy in, and ride the turn around, they have a good buisiness, with good opportunites, they have just run it very poorly.

If there is a capital raising, I would consider participating, but only if I see management chipping in as well, and for a decent amount.

[emearg]

They have appointed a new CFO - being the acting CFO Simon Bosley.

https://www.nzx.com/companies/RAK/announcements/232899

For them to announce a CFO without ANY background information on this guy is unforgivable. The market would want some confidence that Bosley has skills in capital raising, debt management and the like. He might well have those skills, but how would we know with the pathetic two line release from Rakon?

I would have expected two paragraphs outlining his previous employment, his academic qualifications and a notation of his specific financial skills as a minimum...

The previous announcement regarding his acting role was brief as well. Not much on google about him. He isn't even on linkedin. Who is he? Local farmhand turned CFO?

I REALLY should apply for work at Rakon! I think I should be their Lead Technical Architect. I have a phone so I'm qualified. I shall apply this afternoon...

[Dej]

The previous announcement regarding his acting role was brief as well. Not much on google about him. He isn't even on linkedin. Who is he? Local farmhand turned CFO?

I REALLY should apply for work at Rakon! I think I should be their Lead Technical Architect. I have a phone so I'm qualified. I shall apply this afternoon...

If we get even a quarter of what the Robinsons get paid each year I may concider applying also! :eek2:

[blobbles]

You have to be kidding? Does their greed know no bounds?

You should know the answer to that... over 2mill a year for running a company poorly.

I posted a few pages ago that the last annual report stated there were something like 200k plus shares available to employees as part of an employee shareholder plan since 2011... no options taken by any employee. No one in the company wants to invest more, why should we?

Also the Robinsins have stated time and again the SP is way lower than it should be yet none of them have used that as an opportunity to spend some of their 2mill plus a year on buying more of their company they say is just about to turn the corner. Very telling.

[JayRiggs]

Name
Shareholding
%


Warren John Robinson & Trusts Limited <Ahuareka A/C>
24,930,823
13.05




Brent John Robinson
9,915,414
5.19


Darren Paul Robinson
9,914,180
5.19



So the family own a 23.43% stake in it. Let them suffer.

Glad my investment company for my Kiwisaver is not amongst those major shareholders...

With 9.9 million shares each, if Brent and Darren Robinson cashed out now, they'd still get over $2.5 million each. I'd be very happy with $2.5 million!

[Silverlight]

Why would them investing more make it safe though? They have already been proven to be VERY inept with the economic side of, well, pretty much everything, so why would them chucking more money at a losing model be good in your mind?Are you thinking in terms of 1 fool + 2 more fools = a clown party where everyone has fun/wins? (No offence to you Sparky...)


This would be a part of my thesis (albeit a very small part) :p:

There are 2 companies, X and Y, both companies have directors owning 30% plus of the company

These are the financial stats historically for both companies:

Company X



Year
Revenue (m)
Profit (m)
Market Cap (m)


2006
75
8
450


2007
105
16
500


2008
170
11
160


2009
140
5
140


2010
145
-5
150


2011
189
9
60


2012
178
-1
50




Company Y



Year
Revenue (m)
Profit (m)
Market Cap (m)


2006
0
0
45


2007
0
-1
60


2008
0
-5
50


2009
1
-7
160


2010
3
-9
300


2011
9
-8
280


2012
20
-8
500





Company X is about to do a capital raising and the directors are going to fully partcipate. Company Y directors have being selling some of their stakes off to other investors, but still own a fair chunk.

If you had the option of investing money in either company X or company Y, which one would you choose?

[Stranger_Danger]

Those figures get XRO's market cap way wrong.

Otherwise, excellent work, and the table says it all - in both cases.

[blobbles]

The big question is who the hell bought 4% of the dog?

[winner69]

You could always do the old z-Altman score

It's 2.3 .......quite likely to go bankrupt in the next year or so. Is a bit higher than Feltex had

Likely .....unless something's done

That's why to survive they need the things that they were too embarrassed to mention ......drastic write downs and significant amount new capital

Lets say 30 mill of write downs ....that's retained earnings gone

Bal mentioned 3 for 2 at 10 cents in 30 mill capital raising ....he usually spot on ......that'll fix balance sheet but problem really is profitability

[Xerof]

If they have a treasurer, or even a CFO/treasurer, he/her/they are asleep at the wheel. There is no excuse for such long days to collect. I'd say the over 12 months is a likely doubtful debt, which needs to be acknowledged in the p/l sooner rather than later, preferably in tandem with a new prospectus if they are going to the market. Need to clear the decks accountingwise and managementwise by the looks.

whats inventory turn like Sparky?

who is their Broker W69?


disc: dont hold

[winner69]

hey sparks .... that negative $25m reserves shown in equity - the stuff tjhat reduces shareholder equity by the $25m ......most of it seems to be currency translation stuff

Are they waiting for the dollar to drop before it corrrects itself or something .... you understand all this stuff?

[winner69]

it takes the right poeple to make a company succeed, the Robinson's pay themselve's whatever they like. They also have total controll of all aspects of this company and do not have the skills needed to run a publicly listed company.

You can do whatever you like anyway you like to restructure RAK financail and funding but if there is not a complete change in top management you will only be prolonging the inevitable and losing more money on the way.

spot on mate ... like i mentioned profitability is the problem .... no matter how much money they throw at it unless one makes a bob on every widget they make all the new capital will disappear as well

They seem to have caught the Wellington Drive disease

[winner69]

I see Superlife has a few million shares in RAK

Superlife seem to like to dabble in these sort of companies .... Wellington Drive / Rakon to name 2

[winner69]

If they have a treasurer, or even a CFO/treasurer, he/her/they are asleep at the wheel. There is no excuse for such long days to collect. I'd say the over 12 months is a likely doubtful debt, which needs to be acknowledged in the p/l sooner rather than later, preferably in tandem with a new prospectus if they are going to the market. Need to clear the decks accountingwise and managementwise by the looks.

whats inventory turn like Sparky?

who is their Broker W69?


disc: dont hold

don't know but in the past they have used UBS a lot .... the Mogridge connection

[janner]

Too bad the company is a pure dud...

Very much like Pike River.. Why waste so much time on it.. Place the company on share watch and " Move on " As Uncle Hulun would say..

[blobbles]

Anyone noticed on NZX that the NTA of Rakon is now 80.1c? Wasn't it 90c a while back? Why the change?

[blobbles]

On the 22nd of Jan we were talking about it still being 90c (check page 70 on here), so I assume its been since then?

[Vaygor1]

Anyone noticed on NZX that the NTA of Rakon is now 80.1c? Wasn't it 90c a while back? Why the change?

Perhaps it is because RAK's tangible assets aren't so tangible...as in fabricated, just like all the other piffle they disgorge in they announcements and reports.

And in case piffle is a new term to those reading this, I understand it got its origins in 1890 from a combination of 'piddle' and 'trifle'.

[Minerbarejet]

And in case piffle is a new term to those reading this, I understand it got its origins in 1890 from a combination of 'piddle' and 'trifle'.
In 1990 it probably came from "fiddle" and "tripe" but I bow to your superior knowledge in these matters Vaygor1

[moimoi]

New Lows!

And not alot of love being shown in the depth either.

Hmmm, for this to be still going down a week after the announcement, considering the well connected have probably now had sufficient time to have a chat with Head Office about prospects, doesn't look that good.

[lazylarry]

I have averaged down on RAK as I said I would at 25c to take my holdings to over 100,000 shares.
Great price at this level. I am prepared to average down all the way. The fools are the ones selling out now.

I suspect they are going to sign a preferred supplier agreement with Huawei. Bring on 15c!

[Balance]

I think you have all got it wrong. The total assets of RAK are valued at 90c.
At the current price of 37c, it is trading well over 50% below what it's worth. If you take into account future potential, then it's worth well over $1.
I have recently purchased 80,000 shares @ 37c and expect my investment to double within the next 2yrs.
Extremely excited about this!

Should have waited.

You could have bought 118,400 shares instead of 80,000 if you waited!

[Balance]

I have averaged down on RAK as I said I would at 25c to take my holdings to over 100,000 shares.
Great price at this level. I am prepared to average down all the way. The fools are the ones selling out now.

I suspect they are going to sign a preferred supplier agreement with Huawei. Bring on 15c!

Just like the ones who sold to you at 37 cents?

Huawei deal will mean even bigger losses for Rakon as every item they sell at a loss!

[Vaygor1]

There, fixed for ya ;)

LOL. Oh Moosie... you are so cruel !!

[Balance]

If lazy manages to pull that off then he deserves an award and officially has balls of steel. But from where I'm sitting, reading the facts and looking at the way the market is voting, it's not going to be a Cinderella tale for RAK...

Eh, Rak turns into a pumpkin at midnight?

[blobbles]

I have averaged down on RAK as I said I would at 25c to take my holdings to over 100,000 shares.
Great price at this level. I am prepared to average down all the way. The fools are the ones selling out now.

I suspect they are going to sign a preferred supplier agreement with Huawei. Bring on 15c!


Hope you are right lazylarry, but you have to remember this is a company that never returned a dividend, even when it was making average profits, its balance sheet is worsening, its a clear price taker for its equipment, it has no IP (that isn't easily copied), its losses are getting bigger and bigger... and on top of that (or maybe because of that?) its poorly managed by a management team that clearly believes its their own personal cash cow.

Now either you have got it right, or the rest of the market has. I know where I stand (having previously had the same level of enthusiasm as you about 1 1/2 years ago), I aren't sure what model or indicators you are using to uphold your belief in the company, if you could share that might be refreshing! Even if its just gut instinct, it might be enlightening for us to know!

[Vaygor1]

Hmm Duck soup full of buckshot. Don't bite back too hard LL, you might hurt a tooth.

[Balance]

24c now. Rakon is a murderhole. 20c can't be far away now.

There is every reason to stay out for those who are not invested in Rakon, and enough reasons for shareholders already stuck in there to get the hell out.

Means only one thing - down and down until they do a heavily discounted capital raising to fix their balance sheet issues.

Wish it is possible to short this stock.

[Hoop]

Hoop, let us know how you get on. I'd be pleased to hear that at least a few people are making money from Rakon....
Rakon satisfied all the requirements needed leading into a dead cat event. Dead cat bounce events usually average at 30% occuring within 7 days or so before they resume their decline, so 30c bounce looked a good chance in theory.

I bought in 27c on its way down.
Sold out 24c today as the depth is weakening again and not willing to wait another 2 trading days and there are to many sellers a head of me at 25c now...
Aimed to sell at 29c, the bounce up went from 26 to 27 (+3.7%) so effectively it was the equivalent of a free falling cat landing in a swamp:p

Dem's the breaks... lose some win more...minimal loss for me...made it up already on the paper gain in this morning NZX market.

[emearg]

Happens to all of us. If not Rakon now, it was Rakon before. (I lost about 10c per share from 81 to 71c or so back in Sept-Oct 2011.)

The value investor in me occasionally wonders "at what price"......

Is there a best price if most of us are sure Rakon will go out of business or eventually be sold for scrap? Why buy something heading to the tip/wreckers?

[Hoop]

Happens to all of us. If not Rakon now, it was Rakon before. (I lost about 10c per share from 81 to 71c or so back in Sept-Oct 2011.)

The value investor in me occasionally wonders "at what price"......

at what price ???...yeah...for a medium term or longer investment play when a company gets a little wobbly and your wondering how long it can go on like this for in its present state with the decline of the shareprice towards your "tempting" entry price, it pays to do the Z Altman Score first ..Sometimes the result can sober you up..and you quickly move on.

[winner69]

Is there a best price if most of us are sure Rakon will go out of business or eventually be sold for scrap? Why buy something heading to the tip/wreckers?

The tip in wellington has a great recycling shop for stuff sent to the tip ..... the other day there was a huge rubbish bag full of stuffed dogs and teddys for $4 (retail price when new prob $200) ..... bought them and the dog having a great time disemboweling them one at a time

moral of story -- prob somebody will wait until rakon got the knackers yard and buying bits a bulk discount price ..... and that usually means nothing for shareholders

[janner]

You say..

$41m/194m shares = 21cps value. Getting close to that now.

STC... Apart from the educational value.. Why do you pursue this DOG ??..

LazyLarry has a few shares for sale I think.. :t_up: Maybe not.. Maybe he is still averaging down.. Down..Down..

Even if it manages to turn around in the next few months... Tui Ad..

Can you not find better prospects on the NZX ??..

[janner]

No interest in buying. I can assure you of that. I like to look for deep value plays, but this is not one.

I guess you have to call it a morbid curiosity.

Also, by learning about how this company has failed and the signs to look for, I can be more alert when examining other companies, particularly as those tests would be more relevant to the kind of value investing and deep value plays I like to look for.

OK.. can go along with that explanation STC..

Morbid being the operational word.. We live and learn.. :-))

[Balance]

Best short in the market that I have seen in a long time.

Rakon has gone from leading market position to playing catch up.

This is not a sustainable position - hence, the cash bleed and now that the cash is running out, there is only one thing left to do.

Spare a thought for the institutions who bravely put $65m into Rakon at $1.10 in 2009. Then spend a minute thinking about Peter Maire 'reluctantly' selling down his shareholding in 2009 a few months before the capital raising. Interesting!

[winner69]

No interest in buying. I can assure you of that. I like to look for deep value plays, but this is not one.

I guess you have to call it a morbid curiosity.

Also, by learning about how this company has failed and the signs to look for, I can be more alert when examining other companies, particularly as those tests would be more relevant to the kind of value investing and deep value plays I like to look for.

Totally agree sparks .... one can learn heaps and gain real knowledge from examples like this .... and as we have both found out sometimes they do end up as deep value plays (your phrase)

Morbid is the right word .... even with 'good' companies ....ike I'll confess to a morbid fascination with Nuplex ..... made heaps in the mid 00's and shortly after the capital raising a few years ago ..... and knew heaps about nuplex .... but that mordid fascination has never tempted me back ..... but heck i consider myself a lot more knowlegable because of it

[Under Surveillance]

I wish I could assist with the authoring of this project, but I am suffering from writers block on my current work - "The Friends of Mark Hotchin".

I'm tied up too. My opus miniscule "Giants of New Zealand Business: Rod Petrecovic" has stalled as conflicting information needs to be resolved. Some reckon he is 5'2", others that he is exactly 5 feet, others that without built up shoes he is 4'11".

[Vaygor1]

i am wishing to write a book.
This book will be titled THE SECRETS OF MAKING A MULTI MILLION $ BUSINESS WORTHLESS.

Does anyone have contact details for RAK management( Robinson family), Rob Alloway formally ALF and the past directors of feltex.
It is important to recieve acurate and knowledgable advice for this book and I am prepared to employ all the above if they are interested in sharing their wealth of knowledge on the subject.

Nice Post Snapiti.

I think you can add GM's, CEO's, and Board Members from Foretex, Chase, and Security Bank to your list of advisors... and that guy that sent Air New Zealand into a downward spiral by sponsoring every man & his dog.

[Alz99]

All jokes aside and I have read a bit of bashing at the Robinson Family, which I care less about but Rakon still has the contract with Huawei for 5 years making components, Huawei is now the 3rd largest maker of smart phones, and lets be honest from now on 99% of phones that will go on sale will be "smart" and now Huawei claims to have the fastest phone of them all http://www.stuff.co.nz/technology/gadgets/8347573/Huawei-claims-worlds-fastest-smartphone, sounds like Rakon's components may be working well, and hopefully causes some other manufactures to look at their equipment ,surely this must count for some future for the company. no one seems to know much about the "deal between the two companies thou and all I hear is Doom

[Balance]

All jokes aside and I have read a bit of bashing at the Robinson Family, which I care less about but Rakon still has the contract with Huawei for 5 years making components, Huawei is now the 3rd largest maker of smart phones, and lets be honest from now on 99% of phones that will go on sale will be "smart" and now Huawei claims to have the fastest phone of them all http://www.stuff.co.nz/technology/gadgets/8347573/Huawei-claims-worlds-fastest-smartphone, sounds like Rakon's components may be working well, and hopefully causes some other manufactures to look at their equipment ,surely this must count for some future for the company. no one seems to know much about the "deal between the two companies thou and all I hear is Doom

No contract - just a letter of intent - way back in August 2012.

Looking more and more like a typical China deal - show us your wares and your IP, we have a look to see if we can do it ourself or use the infor to screw a better deal from someone else.

If a real deal was done, Rakon would be sending sky rockets all over NZ's skies to celebrate.

[blobbles]

Balance hit the nail on the head with that last post, the Chinese operate exactly as he described. I live there and have many foreign friends who try to do business in China and it's always the same. "You give us the IP and you get to be the CEO! We own the company though, you give us and show us how to make that widget." So the foreigner has all the risk, hardly no reward, gives all their IP away with nothing to show for it. 2 years later the company is closed by the owners and the laowai is out of a job. Around the corner from the closed factory a new factory opens making the widget for less and much lower quality and guess who owns it?

This has actually happened to 2 people I know... no avenue for recompense or challenge. The IP laws exist here but courts only respect guanxi (roughly translated as relationship but you should understand) when it comes to deciding who wins.

The same will or has already happened with Rakon I bet.

[Alz99]

I agree somewhat but that is still speculation on what might happen and I definitely appreciate all the insights that everyone posts, Huawei secured a contract with CNU for the UFB Rollout and timing equipment will be needed hopefully Rakon will get some of those crumbs and make a bit of money this year . but cheers for giving me the knowledge of what a letter of intent stands for :) . Does any one know who else Rakon makes components for ?? well I hope with the announcement of the fastest smart phone other carriers may look into the equipment supplied:cool: in the mean time go OGC go:t_up:

[biker]

Is that the same Huawei who have made a fortune hacking and stealing and then decimating companies in the US?

[Balance]

Is that the same Huawei who have made a fortune hacking and stealing and then decimating companies in the US?

Fair's fair - don't read and listen to all that BS from the US companies either.

Remember how the Japanese were stealing all their car technology? TV technology? Turned out the US companies were investing bugger all in R&D, giving their executives huge bonuses and renumeration, losing thir competitiveness and were lobbying Congress to grant them trade protection!

Apple has no problem getting the iphone etc manufactured in China.

[blobbles]

Harbour Asset management just issued another notice, down to 4.74% ownership from 5.15%. Someone else losing confidence in the company...

Not only that, they are under the magic 5% now, I think that means they can just hock the rest of those shares off and not give notice, right?

Firesale coming up!

[Alz99]

alz 99 have you heard the saying not everything is as it seems.
RAK have a track record with smoke and mirror announcements.
Take for example thier comment last year to the market that said our chinese plant is running 24/7 at full capacity,
wow thats sounds wonderful to an investors, what they forgot to mention was unforetunately we do not have anyone to buy the product yet but we will sell it for less than cost to get rid of it.
Oh definitely how did you find out they are selling it for less than cost?

[blobbles]

Oh definitely how did you find out they are selling it for less than cost?


The company is losing money. Therefore, they are selling their products for less than they make to build them. Pretty easy to spot!

[Balance]

Oh definitely how did you find out they are selling it for less than cost?


Like Welington Drive - the more they sell, the more they lose!

[emearg]

Like Welington Drive - the more they sell, the more they lose!

Up until a few years ago you were right but the last few half years have been changing that trend. They actually look like they may make a profit in a year or two if the trend continues...

Amazing what new and capable management can do. Ross Green is not being missed!

[Balance]

Up until a few years ago you were right but the last few half years have been changing that trend. They actually look like they may make a profit in a year or two if the trend continues...

Amazing what new and capable management can do. Ross Green is not being missed!

Has the new management delivered on their forecasts yet?

It's still the same hands out for money money brigade?

[emearg]

It's still the same hands out for money money brigade?

Sorry was that a statement or a question?

[Balance]

Sorry was that a statement or a question?

Feb 2012 : "A positive EBITDA outcome is not envisaged for 2012, however by the end of the year the company is expected to be operating at a run rate that will lead to a positive result in 2013."

Statement or question?

September 2012 : Share placement (again!!!)

[Dej]

Haha nice. Don't worry about your son, my father always said I needed to know really hard Math otherwise I would get nowhere in life (he has a Masters in Advanced Math). I was a failure at math in high school, yet know I hold down a steady job and easily outperform him on the markets! Go figure eh?

If I have learnt anything about maths, the higher you get in maths, the less numbers you use e.g. http://en.wikipedia.org/wiki/Laplace_transform. But for our purposes, statistical maths is the one you want to be good at.

[Hoop]

Back in the good ol days life was a lot easier....numbers were a lot lower so you could count up to 10 no sweat....If things got complicated (more than 10) you just took off your socks.

[The BOWMAN]

The price slip is probably going to accelerate from now on. I am wondering whether it could be a speculative play at some stage.
At what price, do you think RAK might attract some takeover interest? or interested buyer will just wait and buy from receivership? Or NZ government will think it is pretty 'iconic' and get involved like what they did with Air NZ?

[Balance]

Best short in the market that I have seen in a long time.

Rakon has gone from leading market position to playing catch up.

This is not a sustainable position - hence, the cash bleed and now that the cash is running out, there is only one thing left to do.

Spare a thought for the institutions who bravely put $65m into Rakon at $1.10 in 2009. Then spend a minute thinking about Peter Maire 'reluctantly' selling down his shareholding in 2009 a few months before the capital raising. Interesting!

Still the best short on the market.

21 cents and will be 20 cents on Monday. That's an easy 20% in one week - i.e.. 24 cents sell and buy back at 20 cents.

Harbour still has 9m odd shares to unleash on the market.

Then, there's every likelihood of a heavily discounted 5 for 1 rights issue to come.

[moimoi]

Up 10% in the past 3 days since both the CFD shorters and the bitter last posted. !!

:-) :-)

[Balance]

Up 10% in the past 3 days since both the CFD shorters and the bitter last posted. !!

:-) :-)

Short coverings to lock in some awesome gains, courtesy of Robinsons and Mogridge.

Now for the second leg down towards the 5 for 1 rights issue?

[moimoi]

Now Now Balance. You know you are more widely read than your query indicates.!!

Senor Robinson recently quoted in NZHerald "No Capital Raise" for shareholders.