SKT Sky Network Television Limited.

[Beagle]

Ouch, who did the numbers on this one. 12 cent raising when the share price is 33 cents? They could have raised at 20 cents and it would have made more sense. 12 cents is a guarantee way to ripe out the hearts of current shareholders just to pay debt with no added value.

Both the tiny size of the institutional placement and the vast discount to the current share price are very clear signals there was almost no institutional support for this. It really looks like desperation on SKY's part and a very loud institutional vote of no confidence in management. Current shareholders are being treated as sacrificial lambs.

[Cadalac123]

Here I was analysing sky the other day and wondering if they’d need to raise capital to help pay off the maturing bonds..

To be fair I think 17c might yet a great yield on a short to medium term trade on sky . Still NPAT positive

[Balance]

Both the tiny size of the institutional placement and the vast discount to the current share price are very clear signals there was almost no institutional support for this. It really looks like desperation on SKY's part and a very loud institutional vote of no confidence in management. Current shareholders are being treated as sacrificial lambs.

Sacrificial lambs only if they do not participate in the capital raising.

There will be a lot of punters however who jumped on the bandwagon in the last few weeks however who are going to regret jumping onboard - the fare just went up dramatically!

[Balance]

Here I was analysing sky the other day and wondering if they’d need to raise capital to help pay off the maturing bonds..

To be fair I think 17c might yet a great yield on a short to medium term trade on sky . Still NPAT positive

For a sunset company with NZ rugby as its only point of difference? Pass.

[Cadalac123]

For a sunset company with NZ rugby as its only point of difference? Pass.

I don’t hold but I feel like it’ll be a decent short term trade . Rough though didn’t a director say the shares were ridiculously undervalued at 0.70c a while ago . Amazing how 15c seemed reasonable to him lol

[Beagle]

Sacrificial lambs only if they do not participate in the capital raising.

There will be a lot of punters however who jumped on the bandwagon in the last few weeks however who are going to regret jumping onboard - the fare just went up dramatically!

Plenty will be happy to triple down thinking 12 cents is a screaming bargain. What could possibly go wrong at that price, you can't lose ;)

[winner69]

Plenty will be happy to triple down thinking 12 cents is a screaming bargain. What could possibly go wrong at that price, you can't lose ;)

You might be right though ...you never know

But I think it’s best to try to read between the lines and work out what all this means.

[flyer]

I own 61000 shares, does this mean at 2.83/1 I can get 172630 new shares for 12c = $20715.60c

Add to what my existing worth is ($20130) so $40845.60/233630 = $0.174c per share in theory after the new raising.

Is this correct?

[tga_trader]

At what point do they decide to privatise? Is that was this 'equity raise' is about?
If this pushes the SP down to $0.20 (for arguments sake) the cap is only $87M, and they're still expecting net profit of $20-25M....

[Stranger_Danger]

On a positive note, I like the new plan to sell broadband.

Now I'll be able to pay Sky TV for the internet I use, to access torrent sites with, in order to avoid Sky TV.

[levin123]

Plenty will be happy to triple down thinking 12 cents is a screaming bargain. What could possibly go wrong at that price, you can't lose ;)

Friends are texting me telling my Sky is cheap and I should buy.. :confused:

When it was $1.50 instead of $2 it was "cheap", when it was $0.3 instead of $0.6 it was still cheap....

That said, still a profitable business, albeit a sunset one.

[Balance]

At what point do they decide to privatise? Is that was this 'equity raise' is about?
If this pushes the SP down to $0.20 (for arguments sake) the cap is only $87M, and they're still expecting net profit of $20-25M....

You have to add the new capital, plus forecast profit is $5-$15m (so call it $10m) before non-cash (read write-downs) adjustments.

Valuation post capital raising looks ultra-rich to me! :eek2:

[Entrep]

Pretty margins in reselling fibre are notoriously thin. I suspect they are coming at this from a reducing churn angle?

[winner69]

Speeding ticket last week. ...nothing to disclose they said

[Balance]

Speeding ticket last week. ...nothing to disclose they said

Certainly nothing to indicate positive news pushing the sp up!

[Ogg]

Wow. Thought this wouldn't happen for another 6 months.

RIP to anyone not participating in the entitlement.

Looks like I'll be writing a cheque for $51k.

My new average is 15c.

In for a penny, in for a pound.

[mistaTea]

a 1: 2.83 @ 12c per share would be exactly the same if they did a 1:1 @ 34c per share (which happens to be 1c/share greater than the last trade before the Halt).

So it is a very clever way of offering a 'heavily discounted' rights issue.

That said, existing shareholders who still believe Sky have a profitable future would be crazy not to take the offer (if then can afford to). Their equity would be savagely reduced by non-participation to the point that they would probably never break even again.

For shareholders who have second thoughts about Sky's viability as a going concern (despite the injection of up to $157M cash) then throwing more good money after bad would be illogical.

Ultimately diversifying into Broadband and Mobile in addition to maintaining key partnerships (Vodafone TV plus potentially new partnerships with energy companies etc) will be a good thing. Yes, Broadband is a crowded market - but Sky have a large customer base to market too. If they get their pricing right it has every chance of being successful.

Moving to offer Sky Go as a standalone will also be a good move. Some satellite customers will hand back the STB, but so be it. Sky GO has improved dramatically and would be a cheaper way of offering a streaming option to the many customers who still enjoy the more traditional bundles. The recent move to allow casting was a reasonably strong signal that this was where they were going with the product.

Standalone Sky GO and Vodafone TV customers should ultimately have access to better bundles. There should be no need, for example, to force a customer to purchase Starter as an entry package. Because there are no costs with satellite and STB installation, there should be much more flexibility in Bundles. If a customer just wants to subscribe to Sport for example, offer a standalone price. $39.99/month Standalone but only $29.99/month if you are adding it to an entertainment bundle etc.

A lot of possibilities. Lower average revenue per customer for sure, but many more customers.

[Balance]

Reason why it is a 2.83 : 1 rights issue is because the underwriters are only prepared to back the deal on such a basis. It’s pointing a gun to the head of existing shareholders.

[Ogg]

Reason why it is a 2.83 : 1 rights issue is because the underwriters are only prepared to back the deal on such a basis. It’s pointing a gun to the head of existing shareholders.

I don't think so.

It's to flush out all the cash strapped "ma and pa" retail holders. "Goldman and Co" will pick up their cheap shares at 12, and will likely accumulate more after. Then when the dividends are about start again and the turn around is complete, they'll sell it off to a hedge fund and make a huge profit. Probably already have a buyer lined up. Standard stuff really.

[Ogg]

Reason why it is a 2.83 : 1 rights issue is because the underwriters are only prepared to back the deal on such a basis. It’s pointing a gun to the head of existing shareholders.

A bit like Metro ah Balance...Give Bain a call.

[mistaTea]

Reason why it is a 2.83 : 1 rights issue is because the underwriters are only prepared to back the deal on such a basis. It’s pointing a gun to the head of existing shareholders.

Agreed, they have essentially forced existing retail shareholders to participate by going 1 : 2.83.

You can apply for up to 20% more than your allotment too. So wealthy shareholders who take up their allotment and then some will probably end up doing very well out of this, whereas the shareholders with limited means that are unable to participate will do terribly.

[Balance]

Agreed, they have essentially forced existing retail shareholders to participate by going 1 : 2.83.

You can apply for up to 20% more than your allotment too. So wealthy shareholders who take up their allotment and then some will probably end up doing very well out of this, whereas the shareholders with limited means that are unable to participate will do terribly.

Yup - like the punters who piled in the last few weeks.

[Cadalac123]

Certainly nothing to indicate positive news pushing the sp up!


Lol how about the sudden distribution over the last 12 days .

NZX is a bit of a joke of an exchange isn’t it . Yeah sure no one knew about the capital raising at sub 20c and that had nothing to do with the heavy distribution of shares!!!

[Beagle]

Reason why it is a 2.83 : 1 rights issue is because the underwriters are only prepared to back the deal on such a basis. It’s pointing a gun to the head of existing shareholders.

I think its disgraceful and disrespectful to existing shareholders. Not everyone can write a cheque for the required amount. Institutions are basically giving the middle finger to this issue, the size of the placement redefines the meaning of the word pathetic.

The systemic problem I see is that management think live sport is the panacea for all their woes. Oh wait...now its broadband. They literally seem to have no idea that many people subscribe to watch anything else but sport on Sky. Disc: Sky subscriber without sport. (watching vastly overpaid, spoiled and idolized athletes chasing silly balls around is a hugely overrated form of entertainment in my opinion. Who cares who wins, what does it really matter....).

[theace]

Have I understood this correctly .... if I had a 100 shares, I can apply for 283 additional shares? and if successful I'll end up with 383 shares?

[winner69]

Have I understood this correctly .... if I had a 100 shares, I can apply for 283 additional shares? and if successful I'll end up with 383 shares?

Yep ...but you need to send them $34 as well.

[Ogg]

Have I understood this correctly .... if I had a 100 shares, I can apply for 283 additional shares? and if successful I'll end up with 383 shares?

Technically you can apply for 339 shares and pay them $41. Might only get 283 though and a $7 refund.

[airedale]

I own 61000 shares, does this mean at 2.83/1 I can get 172630 new shares for 12c = $20715.60c

Add to what my existing worth is ($20130) so $40845.60/233630 = $0.174c per share in theory after the new raising.

Is this correct?
The thing that I take from this fund raising, leaving aside any consideration of earlier buys, is that this is fully underwritten at 12 cents. So somebody {instos, fund managers, professionals etc.} is willing to take a punt at that price. So if the price gets to .174 cents again you will be back in profit. 12 cents to 18 cents, will it make 50%.? after the fund raising. I think so, you pays your money and takes a chance.

[winner69]

The thing that I take from this fund raising, leaving aside any consideration of earlier buys, is that this is fully underwritten at 12 cents. So somebody {instos, fund managers, professionals etc.} is willing to take a punt at that price. So if the price gets to .174 cents again you will be back in profit. 12 cents to 18 cents, will it make 50%.? after the fund raising. I think so, you pays your money and takes a chance.

Like the the use of the term fund raising .....like a charity need some cash to stay afloat.:D

[moimoi]

Well done to the contrarian buyers of the bonds over the past couple of months.

They look to have a better chance of being made whole now via the wipe-out of the equity.

GLTA.

[Dlownz]

I think the thing that surprised me was the lowball offer of 12 cents. Honesty would have though 20 cents would have been more suitable. Does anyone know how they would have come to this figure. Also after the share placement will they now have 1.5 billion shares or am I wrong. That's more than blt (bliss). Will this bring the share price down to 15 to 20 cents on opening?
I almost posted yesterday about sky must be about to announce something but didn't. This one while not surprising about the raising has surprised me with the price.
So what's the price of a company now heavily diluted and what could they get to in 2 years. 45 cents if we are lucky?
Mister tea I know you have a huge holding how are you going to approach this?

[mistaTea]

I think the thing that surprised me was the lowball offer of 12 cents. Honesty would have though 20 cents would have been more suitable. Does anyone know how they would have come to this figure. Also after the share placement will they now have 1.5 billion shares or am I wrong. That's more than blt (bliss). Will this bring the share price down to 15 to 20 cents on opening?
I almost posted yesterday about sky must be about to announce something but didn't. This one while not surprising about the raising has surprised me with the price.
So what's the price of a company now heavily diluted and what could they get to in 2 years. 45 cents if we are lucky?
Mister tea I know you have a huge holding how are you going to approach this?

Not sure how their advisors came up with the 1:2.83. However, as I mention in a previous post it is a clever way of making it look like a heavily discounted rights offer when in fact it is not. 1:2.83 @ 12 cents is exactly the same as if they did a 1:1 @ 34c (near enough to the last closing SP).

So it hopefully attracts a lot of interest given the 'huge discount' while in reality it allows them to raise as much capital as possible given the low SP.

Those who participate are going to do just fine - it is only those who don't or can't that will be diluted to oblivion. The ones that can't participate will create even more opportunity for those who can (given you can bid for 1: 2.83 + 20%)

If the rights offer is fully subscribed (and I expect it will be) then there will be more like 1.67B shares outstanding.

Who knows what the SP will do. In theory it would open at 17c I suppose (previous market cap + $157M cash injection). But if the analysts etc are broadly optimistic that Sky is much better placed now with lower debt and a clearer plan moving forward (i.e. the entry into broadband), then it is not crazy to think there will be more optimism which would lift the SP. By how much? Who knows. A new Sky that has multiple revenue streams (content aggregation, broadband and mobile) as well as an international rugby offering (once international rugby resumes) will clearly be worth a lot more over time than the current one-trick pony.

Remember that time Obama roasted Trump? And it ended up being the final catalyst for him to run for POTUS? I have wondered if Spark releasing Spark Sport, and then Moutter rubbing Sky's nose in it over the RWC would be an equivalent moment. Spark have not commented yet, but I imagine the notion of Sky fighting fire with fire, with already 1M customers to market to will make them squirm a bit now. The hunter becomes the hunted?

How will I approach it? I am going to try and get my hands on as many shares as I can purchase (my entire allotment + 20%). I do genuinely feel for those who can't participate - but the horse has bolted now. I will take my full entitlement plus some shares from those who can't participate.

At the end of the day, I am a capitalist.

[Baa_Baa]

Not sure how their advisors came up with the 1:2.83. However, as I mention in a previous post it is a clever way of making it look like a heavily discounted rights offer when in fact it is not. 1:2.83 @ 12 cents is exactly the same as if they did a 1:1 @ 34c (near enough to the last closing SP).

So it hopefully attracts a lot of interest given the 'huge discount' while in reality it allows them to raise as much capital as possible given the low SP.

Those who participate are going to do just fine - it is only those who don't or can't that will be diluted to oblivion. The ones that can't participate will create even more opportunity for those who can (given you can bid for 1: 2.83 + 20%)

If the rights offer is fully subscribed (and I expect it will be) then there will be more like 1.67B shares outstanding.

Who knows what the SP will do. In theory it would open at 17c I suppose (previous market cap + $157M cash injection). But if the analysts etc are broadly optimistic that Sky is much better placed now with lower debt and a clearer plan moving forward (i.e. the entry into broadband), then it is not crazy to think there will be more optimism which would lift the SP. By how much? Who knows. A new Sky that has multiple revenue streams (content aggregation, broadband and mobile) as well as an international rugby offering (once international rugby resumes) will clearly be worth a lot more over time than the current one-trick pony.

Remember that time Obama roasted Trump? And it ended up being the final catalyst for him to run for POTUS? I have wondered if Spark releasing Spark Sport, and then Moutter rubbing Sky's nose in it over the RWC would be an equivalent moment. Spark have not commented yet, but I imagine the notion of Sky fighting fire with fire, with already 1M customers to market to will make them squirm a bit now. The hunter becomes the hunted?

How will I approach it? I am going to try and get my hands on as many shares as I can purchase (my entire allotment + 20%). I do genuinely feel for those who can't participate - but the horse has bolted now. I will take my full entitlement plus some shares from those who can't participate.

At the end of the day, I am a capitalist.

I’d say you’re an optimist rather than a capitalist, this looks like the last roll of the dice for sky. Gltah you might need it

[macduffy]

The pricing of an issue is normally related to the price at which a company can attract underwriters.

:mellow:

[Dlownz]

Not sure how their advisors came up with the 1:2.83. However, as I mention in a previous post it is a clever way of making it look like a heavily discounted rights offer when in fact it is not. 1:2.83 @ 12 cents is exactly the same as if they did a 1:1 @ 34c (near enough to the last closing SP).

So it hopefully attracts a lot of interest given the 'huge discount' while in reality it allows them to raise as much capital as possible given the low SP.

Those who participate are going to do just fine - it is only those who don't or can't that will be diluted to oblivion. The ones that can't participate will create even more opportunity for those who can (given you can bid for 1: 2.83 + 20%)

If the rights offer is fully subscribed (and I expect it will be) then there will be more like 1.67B shares outstanding.

Who knows what the SP will do. In theory it would open at 17c I suppose (previous market cap + $157M cash injection). But if the analysts etc are broadly optimistic that Sky is much better placed now with lower debt and a clearer plan moving forward (i.e. the entry into broadband), then it is not crazy to think there will be more optimism which would lift the SP. By how much? Who knows. A new Sky that has multiple revenue streams (content aggregation, broadband and mobile) as well as an international rugby offering (once international rugby resumes) will clearly be worth a lot more over time than the current one-trick pony.

Remember that time Obama roasted Trump? And it ended up being the final catalyst for him to run for POTUS? I have wondered if Spark releasing Spark Sport, and then Moutter rubbing Sky's nose in it over the RWC would be an equivalent moment. Spark have not commented yet, but I imagine the notion of Sky fighting fire with fire, with already 1M customers to market to will make them squirm a bit now. The hunter becomes the hunted?

How will I approach it? I am going to try and get my hands on as many shares as I can purchase (my entire allotment + 20%). I do genuinely feel for those who can't participate - but the horse has bolted now. I will take my full entitlement plus some shares from those who can't participate.

At the end of the day, I am a capitalist.

How will rugby pass owners and nz rugby handle this. I don't imagine nz rugby have the money to put towards this at a time when they are squeezed as well as sky most likely holding back money from sports rights. 5 percent will turn into what?
From what I read of sky's announment it sounded like they were heading in a good direction. Although there forecast for the next year seemed too low if you ask me. Are they under promising or just being really cautious with the current climate. They increased subscribers all be it with streaming but a great rise. And only lost what I would think was a small amount of sattalite subscribers

[mistaTea]

How will rugby pass owners and nz rugby handle this. I don't imagine nz rugby have the money to put towards this at a time when they are squeezed as well as sky most likely holding back money from sports rights. 5 percent will turn into what?


Time will tell what they do. But as major shareholders I think Sky would have sounded them out.

if NZR don't participate then their current 5% will drop to 1.3%.

They need ~$7M to fully participate. Imo they would be crazy not to. Sky seem to be negotiating constructively with them on the payments issue (rather than coming down on them like a sledge hammer. Sky do actually want NZR to survive after all...).

The government is throwing a fair amount of cash at Sports bodies. NZR will clearly get a lot of the pot...If they do want to participate, I don't think coming up with the $7M will be an unsurpassable obstacle. Just an opinion, I stand to be corrected.

However from memory their 5% shares was based on $1.10/share. If they do not participate then 'new Sky' would need to build up to having a Market Cap of ~$1.83B for NZR to just break even. $1.83B is one hell of a long way from $300M (current market cap + $157M cash injection). So they really do need to participate I think.

Even worse for RugbyPass if they don't pony up the ~$8M. The shares they acquired were based on a SP of $1.24 I think. If they don't participate then Sky would need to hit a Market Cap of $2B before they broke even.

[Stranger_Danger]

Time will tell what they do. But as major shareholders I think Sky would have sounded them out.

if NZR don't participate then their current 5% will drop to 1.3%.

They need ~$7M to fully participate. Imo they would be crazy not to. Sky seem to be negotiating constructively with them on the payments issue (rather than coming down on them like a sledge hammer. Sky do actually want NZR to survive after all...).

The government is throwing a fair amount of cash at Sports bodies. NZR will clearly get a lot of the pot...If they do want to participate, I don't think coming up with the $7M will be an unsurpassable obstacle. Just an opinion, I stand to be corrected.

However from memory their 5% shares was based on $1.10/share. If they do not participate then 'new Sky' would need to build up to having a Market Cap of ~$1.83B for NZR to just break even. $1.83B is one hell of a long way from $300M (current market cap + $157M cash injection). So they really do need to participate I think.

Even worse for RugbyPass if they don't pony up the ~$8M. The shares they acquired were based on a SP of $1.24 I think. If they don't participate then Sky would need to hit a Market Cap of $2B before they broke even.

What they paid for their original shares is irrelevant. The only question is whether making a new investment at 12cps makes sense or not. If they were wrong at $1.10 and $1.24, who says they're not wrong at 12 cents?

Personally, I enjoy nothing more than recognising I was wrong about something, declining to put in more, and then getting the hell out of dodge. Sometimes the money you avoided losing is the best type of win there is.

From where I sit, there have been many large placements in Australasia in recent weeks, and I've struggled to get any of anything decent, but despite the small size, it sounded like I could possibly have gotten some of these. I don't see that as a compliment to either myself or Sky TV! Most of the placements have been snapped up, very often, they have been done deals before the plebs even hear about them.

Against the backdrop of this flood of capital looking for a home, just massive demand for anything decent, do you really think they would do this at 12 cents, with almost no institutional shares to be placed, if they felt they had better options?

This one smacks of desperation because it is desperate. It reminds me of the equally desperate Southern Cross Media raising - a business that is even more crappy - but it must be said the new SXL shares are trading roughly double the desperation price today. Hopefully for holders that can happen here.....but I'm still really, really struggling to see a longer term future for Sky TV, and without this raising, there wouldn't have been a short term future.

[mistaTea]

What they paid for their original shares is irrelevant. The only question is whether making a new investment at 12cps makes sense or not. If they were wrong at $1.10 and $1.24, who says they're not wrong at 12 cents?


I don't disagree there - see my previous post (https://www.sharetrader.co.nz/showthread.php?4216-SKT-Sky-Network-Television-Limited&p=816786&viewfull=1#post816786).

"That said, existing shareholders who still believe Sky have a profitable future would be crazy not to take the offer (if then can afford to). Their equity would be savagely reduced by non-participation to the point that they would probably never break even again.

For shareholders who have second thoughts about Sky's viability as a going concern (despite the injection of up to $157M cash) then throwing more good money after bad would be illogical."

Obviously if RP or NZR think that the story has changed, or they just made a mistake with the first placement...then purchasing more shares @12c per share just because 'it's cheaper' would be a bad idea. Neither can dump their existing shares for a couple of years of course, but regardless it would make no sense to throw more good money at a doomed business venture.

However, assuming they do still see a future for the business, and are of the view that they want to continue to be significant shareholders...and that the current offer is 'cheap'... then they will want to move Heaven and Earth to make sure that they get their full entitlement.

[Ogg]

I think the thing that surprised me was the lowball offer of 12 cents. Honesty would have though 20 cents would have been more suitable. Does anyone know how they would have come to this figure. Also after the share placement will they now have 1.5 billion shares or am I wrong. That's more than blt (bliss). Will this bring the share price down to 15 to 20 cents on opening?
I almost posted yesterday about sky must be about to announce something but didn't. This one while not surprising about the raising has surprised me with the price.
So what's the price of a company now heavily diluted and what could they get to in 2 years. 45 cents if we are lucky?
Mister tea I know you have a huge holding how are you going to approach this?

1,670,747,564 shares on issue post placement.

Equivalent to 17.4c (based on last trading price of 33c).

52 week low of 19c, equivalent to 13.8c post raise.

Recent high of 48c this month, equivalent to 21.3c post raise.

On 30th April net debt was $159m. Share price was 28c. Enterprise value approx $281m.

Placement at 12c gives enterprise value of $211m ($200m market cap plus $11m debt).

Difference of $70m or 24%, or 7c per share.

In other words, new capital is being injected at an equivalent price of 21c to the 30th April valuation.

If you bought shares below 21 you are not getting diluted. If you bought shares above 21 you are getting diluted - unless you participate in the entitlement.

I suspect it will resume trading at 21c.

[Entrep]

Sought after placements don't visit the placement price, desperate placements nearly always do, or they go under. I would put this one in the latter.

[winner69]

Mistatea, Ogg et al, you guys must be happy as Larry getting a opportunity like this to get so many shares on the cheap

Your conviction is paying off

[Arthur]

It is underwritten, so there will just be a change of ownership. At first glance at the presentation Sky looks interesting at this price.

[RTM]

When do they start trading again ?

[see weed]

So if I want to participate in this spp, then will have today and Monday until 5pm to buy SKT shares to be able to do it?

[flyer]

So if I want to participate in this spp, then will have today and Monday until 5pm to buy SKT shares to be able to do it?
Yes, that's how I see it. Revised share price is listed at 17.5 on ASB at the moment.

[macduffy]

So if I want to participate in this spp, then will have today and Monday until 5pm to buy SKT shares to be able to do it?

I don't think so. Record date for the issue is Monday, ie ownership must be registered by then. As trading is currently halted and as settlement for trades is two business days, entitlements will be as per the current register.

[mistaTea]

Yes, that is how I understand it.

The whole deal is to raise capital and benefit existing shareholders (who have been through the ringer!). Not to let opportunists try and jump on at the 11th hour and make a 'quick buck' :eek2:

[sb9]

I don't think so. Record date for the issue is Monday, ie ownership must be registered by then. As trading is currently halted and as settlement for trades is two business days, entitlements will be as per the current register.

Pretty much if you're not a holder before the announcement came out which was y'day, then you aren't eligible for SPP offer.

[macduffy]

Note that it is an entitlement offer, ie based on number of shares held, not a Share Purchase Plan.

[sb9]

Note that it is an entitlement offer, ie based on number of shares held, not a Share Purchase Plan.

Sure, thanks for correction.

[klid]

I sold all mine the day before this for $0.35. But I still hold a little bit in my daughter's account through Sharesies O_o they better allow take part

Although not sure I want to, don't like these guys much

[see weed]

I don't think so. Record date for the issue is Monday, ie ownership must be registered by then. As trading is currently halted and as settlement for trades is two business days, entitlements will be as per the current register.
So does that mean you have until Monday at 5pm to be on the register? Sometimes I will buy into a company by 5pm the day before it goes ex dividend and am entitled to the dividend. Just thought it might be the same.

[k14]

Very interesting learning experience. I bought in to SKT about a month ago at 27c. Still feeling confident in the company but weary of confirmation bias. Fairly comfortable adding to my investment through this rights issue but this is new territory for me (very newbie investor).

Couple of thoughts from the presentation:
Broadband - Good idea. Trustpower and Contact have executed this well. Low margins but shown to reduce churn. Contact in the HY FY20 presentation stated 20000 customers and I think they launched broadband about 2.5-3 years ago.
Live Sport - Biggest risk here. How long till sport returns is a big risk. There is some interesting wording around the rights. Seems that some of the contracts aren't black and white over pro-rata payments if the sports are disrupted like they are currently. You would think Sky has reasonable bargaining power here although may have to pay money now in return for discounted future rights.
FY21 forecast - I am hoping they are very conservative here. Slightly concerning the continual degradation of ARPU although if they can keep subscribers increasing (albeit most likely lower value users) this should reduce this reduction.

By my calcs, would need to get share price back to 15.9c to break even at full 100% rights option and 15.4c for 120%. Seems reasonable no brainer to reduce loss, even if I sell some or all of them immediately after they are issued.

[see weed]

Yes, that is how I understand it.

The whole deal is to raise capital and benefit existing shareholders (who have been through the ringer!). Not to let opportunists try and jump on at the 11th hour and make a 'quick buck' :eek2:
There seems to be 195,900 shares on buy side at 20c and over. Would that be existing shareholders trying to get more before 5pm. cut off time on Monday? Or new opportunists?

[Ogg]

There seems to be 195,900 shares on buy side at 20c and over. Would that be existing shareholders trying to get more before 5pm. cut off time on Monday? Or new opportunists?

Stop talking about the cut off time. Unless you bought shares on or before Wednesday 20th May you won't be eligible.

[macduffy]

So does that mean you have until Monday at 5pm to be on the register? Sometimes I will buy into a company by 5pm the day before it goes ex dividend and am entitled to the dividend. Just thought it might be the same.

In the example you quoted, you bought "cum div" and it doesn't matter when registration occurs; the registrar will include your holding when determining who gets what dividend. It's all "automatic" these days but if by some mischance the transfer didn't get processed, you would claim the div from whoever you purchased the shares from. Not so in this instance when an entitlement date has been determined, ie Monday 25 May, trading is halted and settlement, ie registration takes place 2 days after purchase. Hope this helps.

[see weed]

Stop talking about the cut off time. Unless you bought shares on or before Wednesday 20th May you won't be eligible.
Thanks, and sorry for being so ignorant. I bought 80,000 on 12/5/20 and was getting a bit greedy thinking I could get more, but I can't, confirmed from little talk with SKT offer information line:mellow:

[see weed]

Thanks, and sorry to everyone. I just love this forum, everyone is so helpful:t_up:.

[Balance]

Thanks, and sorry for being so ignorant. I bought 80,000 on 12/5/20 and was getting a bit greedy thinking I could get more, but I can't, confirmed from little talk with SKT offer information line:mellow:

Seems like Sky's capital raising & underwriting structure is working a treat!

We have posters here clamoring for 'cheap' shares being issued at 12c, and expecting in the post-issue market for the shares to trade at 15c to 20c.

A few observations:

1. The reason why the underwriters require such a heavily discounted and dilutionary manner is so that:

(i) existing shareholders are 'forced' to take up the issue or get diluted heavily, and

(ii) the underwriters will pick up shortfall stock at a very 'cheap' price with little downside.

2. There is a very good example to show what's likely to happen post the rights issue - Fletcher Forst (FFS).

FFS had to do a similar capital raising way back in 2000 (2:1 at 25c) after failing to find a buyer and after the banks pulled their funding support. Basically, it's a bailout.

SKT is doing exactly the same thing - it's clear no suitor has emerged to takeover the company and the banks want their money back.

In the case of FFS, the underwriters ended up with a big chunk of the capital-raising stock (>20%) at 25c.

They were happy to dish the stock out at 25.5c to 26c for months on end, taking their underwriting fees as well as the %tage gain from the market by selling out their underwritten shortfall stock.

FFS sp traded at 24c at times during that period as impatient traders bailed out on bad days.

So - my prediction is that, depending on what %tage of the stock the underwriters end up with, you will see SKT trading at just above 12c for a while.

[Ogg]

Seems like Sky's capital raising & underwriting structure is working a treat!

expecting in the post-issue market for the shares to trade at 15c to 20c.

KMD has doubled from placement price of only 50c.




1. The reason why the underwriters require such a heavily discounted and dilutionary manner is so that:

(i) existing shareholders are 'forced' to take up the issue or get diluted heavily, and

(ii) the underwriters will pick up shortfall stock at a very 'cheap' price with little downside.



Underwriters unlikely to get much stock. Only got 4% of issue currently. Most will take up their entitlement in full. Exlcluding perhaps Rugby NZ and RugbyPass shareholders.




SKT is doing exactly the same thing - it's clear no suitor has emerged to takeover the company and the banks want their money back.



Bank happy to lend more, now $200m + extended 1 year.




In the case of FFS, the underwriters ended up with a big chunk of the capital-raising stock (>20%) at 25c.



Doubt they will get more than $50m total. Approx 16% issue.

Conclusion. This is great entitlement offer if

A) You participate.
B) You got Sky shares relatively recently

[biker]

I don’t think you can compare a company like FFS with SKT and that’s an understatement.
SKT has so much more potential upside than FFS ever had and I think the market will acknowledge that when it all settles down.
My view is it will be WELL north of 12c
I think we got a glimpse of the future of the share price when the NZX made a price inquiry recently.
Was there a leak of what was about to transpire? It’s got that look about it and it was a VERY positive response.

[Balance]

KMD has doubled from placement price of only 50c.



KMD was not in a distressed situation when it pro-actively raised the capital required. the issue was a 1.2 : 1 vs a 2.83 :1 here.

Underwriters unlikely to get much stock. Only got 4% of issue currently. Most will take up their entitlement in full. Exlcluding perhaps Rugby NZ and RugbyPass shareholders.

Time will tell. I expect underwriters to end up with >20% of the underwritten stock.

Bank happy to lend more, now $200m + extended 1 year.

You can be sure that the banks will only allow drawdown subject to certain conditions and covenants being met.

Doubt they will get more than $50m total. Approx 16% issue.

Time will tell.

Conclusion. This is great entitlement offer if

A) You participate.
B) You got Sky shares relatively recently

Time will tell.

Just be cautious out there, people - the structure of the issue (2.83 : 1) says SKT has run out of options.

There's certainly no white knight waiting out there. SKT is going to have to live or die on its own - in a sunset industry.

[airedale]

I don’t think you can compare a company like FFS with SKT and that’s an understatement.
SKT has so much more potential upside than FFS ever had and I think the market will acknowledge that when it all settles down.
My view is it will be WELL north of 12c
I think we got a glimpse of the future of the share price when the NZX made a price inquiry recently.
Was there a leak of what was about to transpire? It’s got that look about it and it was a VERY positive response.

Hi Biker, can you post a link to the reply from SKT to the NZX.

[Balance]

I don’t think you can compare a company like FFS with SKT and that’s an understatement.
SKT has so much more potential upside than FFS ever had and I think the market will acknowledge that when it all settles down.
My view is it will be WELL north of 12c
I think we got a glimpse of the future of the share price when the NZX made a price inquiry recently.
Was there a leak of what was about to transpire? It’s got that look about it and it was a VERY positive response.

The ‘future’ I can tell you was a rumour that a deal was in the offing and the punters jumped in on the price momentum.

Deal turned out to be a FFS type capital raising!

[Ogg]

The ‘future’ I can tell you was a rumour that a deal was in the offing and the punters jumped in on the price momentum.

Deal turned out to be a FFS type capital raising!

Wonder what the MPG deal will be like...

[Balance]

Wonder what the MPG deal will be like...

5:1 at 5c if they need to raise capital?

It is what it is - these are unusual & desperate times for some companies.

[Arbroath]

Wonder what the MPG deal will be like...

MPG have repaid $26m in 18 months from a still strongly cashflow positive business. Not clear that they will have to raise capital but the next 12 months will be very tough once current house builds are completed. Also SKY are raising more than their pre-deal market cap whereas if MPG did raise they probably only need half their market cap...

[Ogg]

5:1 at 5c if they need to raise capital?

It is what it is - these are unusual & desperate times for some companies.

I have MPG at 0.067 TERP on the above figures.

Wouldn't Metro be better to raise now then during an upcoming construction slump?

EBITDA debt ratio on MPG is 4.0x. Bank probably already tapping them on the shoulder. Maybe that's why Bain aren't buying more on market.

[biker]

The Question:

12 May 2020
Dear Blair,
Sky Network Television Limited - Price Enquiry
We write with respect to the continuous disclosure Listing Rules.
NZX Limited
Level 1, NZX Centre 11 Cable Street
PO Box 2959 Wellington 6140 New Zealand
Tel +64 4 472 7599
www.nzx.com
Blair Woodbury
Chief Financial Officer
Sky Network Television Limited
By email: blair.woodbury@sky.co.nz CC: sophie.moloney@sky.co.nz
paresh.patel@sky.co.nz
Listing Rule 3.1.1 (”the rule”) is set out in the Schedule attached to this letter. In summary, this rule requires issuers to immediately disclose any Material Information to NZX Limited (“NZX”). The rule provides limited exceptions to this obligation. Material Information does not need to be disclosed where a reasonable person would not expect the information to be disclosed and where the information is confidential and its confidentiality is maintained and where one of five safe harbours applies.
The price of Sky Network Television Limited Ordinary Shares (SKT) has increased from $0.32 at the close on Friday 8 May 2020, to $0.465, being the current price at 10:30am on 12 May 2020. This represents an increase of 45%.
Given this price increase, please advise NZX whether Sky Network Television continues to comply with Listing Rule 3.1.1.
Could you please provide NZX with an answer to the above question (email: surveillance@nzx.com) before 4:00 pm today, Tuesday 12 May 2020.
Please provide your response to this letter in “PDF” format and note that it will be published in full to the market.
Kind Regards,
Phil Solarz
NZX Market Surveillance

The Answer:

12 May 2020
NZX Limited
Level 1, NZX Centre 11 Cable Street WELLINGTON
Attention: Phil Solarz NZX Market Surveillance
Dear Phil
SKT Price Enquiry
In response to your letter dated 12 May 2020 we confirm Sky Network Television Limited is in compliance with NZX Listing Rule 3.1.1.
Yours sincerely
Blair Woodbury
Chief Financial Officer
Sky, PO Box 9059, Newmarket, Auckland 1149, New Zealand
10 Panorama Road, Mt Wellington, Auckland 1060, New Zealand, +64 9 579 9999 sky.co.nz

[biker]

Hi Biker, can you post a link to the reply from SKT to the NZX.

See above for the question and the answer.

[airedale]

Thanks, Biker.

[Dlownz]

Hey mista tea. I know your shareholding was quite high. How much are you going to have to put up to maintain holding. If you like to devulge 🙂.
Its a real shame Mr stewert wasn't put in charge a couple of years earlier. Although broadband and then possibly power are low profit enterprises its the linking of things together to make better deals for the consumer bundling. With spark its the offer of half price spotify and free lightbox. I'm with spark for the sole reason of half price spotify. My dad has sky and I know he would switch broadband for a cheaper package.

[mistaTea]

Hey mista tea. I know your shareholding was quite high. How much are you going to have to put up to maintain holding. If you like to devulge .
Its a real shame Mr stewert wasn't put in charge a couple of years earlier. Although broadband and then possibly power are low profit enterprises its the linking of things together to make better deals for the consumer bundling. With spark its the offer of half price spotify and free lightbox. I'm with spark for the sole reason of half price spotify. My dad has sky and I know he would switch broadband for a cheaper package.

I am a little reluctant to get into the precise dollars and cents of the deal at this junction, but it is a 6 figure sum.

I am also happy with the prospect of broadband, mobile etc. Initially they are going to offer their broadband service to satellite customers. That immediately gives them over half a million existing customers to advertise to. The possibilities of how they might offer discounted bundles are numerous, and I do think it will be very popular with existing satellite subs.

And that is, potentially, just the tip of the iceberg. They won't make a hell of a lot off the broadband in and of itself - but it is the bundling that will enable them to grow profits from their higher margin entertainment business.

They look set to offer Sky GO as a standalone product too. More savings for customers, and a big move into streaming for Sky as their existing product becomes more mainstream (as opposed to just a nice 'extra' for the dwindling satellite base).

There will be winners and losers under this deal for sure. And it would have been much better if they did the capital raising when the shares were north of $1 - they could have raised way more money and diluted shareholders who can't/won't participate far less.

However, we are where we are. It's not all gravy - but there is a lot to be happy about too for the participating shareholders.

[Baa_Baa]

After a 5.9 year 97.5% decline in share price, it amazes me that anyone could be optimistic about SKY.

[winner69]

After a 5.9 year 97.5% decline in share price, it amazes me that anyone could be optimistic about SKY.

Jeez baabaa, is that right .....97.5% is huge ....could round it to 100% .....but one still has tickets to the show.

[winner69]

An acquaintance says he’s got a bundle of SKY shares but doesn’t know much about cap raisings and asked what does it mean and whst should he do.

I told him it’s about the company asking him to give about 34 cents for every share he has and then he would then have heaps and heaps more shares. His response ‘what, the bastards want my cash’. I said that’s right and lots of it.


He said ‘stuff them, I got them so they could pay me interest’.......’ and I I told him he could just ignore the whole thing and not do anything but didn’t elaborate on dilution because understanding that would be way beyond him.

I don’t think I’d make a good financial advisor and some people should not really be buying shares.

[Ogg]

An acquaintance says he’s got a bundle of SKY shares but doesn’t know much about cap raisings and asked what does it mean and whst should he do.

I told him it’s about the company asking him to give about 34 cents for every share he has and then he would then have heaps and heaps more shares. His response ‘what, the bastards want my cash’. I said that’s right and lots of it.


He said ‘stuff them, I got them so they could pay me interest’.......’ and I I told him he could just ignore the whole thing and not do anything but didn’t elaborate on dilution because understanding that would be way beyond him.

I don’t think I’d make a good financial advisor and some people should not really be buying shares.

I'll be happy to take his entitlement as I'm going in at 120%.

[RupertBear]

An acquaintance says he’s got a bundle of SKY shares but doesn’t know much about cap raisings and asked what does it mean and whst should he do.

I told him it’s about the company asking him to give about 34 cents for every share he has and then he would then have heaps and heaps more shares. His response ‘what, the bastards want my cash’. I said that’s right and lots of it.


He said ‘stuff them, I got them so they could pay me interest’.......’ and I I told him he could just ignore the whole thing and not do anything but didn’t elaborate on dilution because understanding that would be way beyond him.

I don’t think I’d make a good financial advisor and some people should not really be buying shares.

Would he belong to the Bowling Club by any chance? :D

[Dlownz]

It's a case if having to really. After buying the break even is 17 to 18 cents.
Doing nothing you lose alot. So even buying then selling at least you don't lose so much. Unless of course sky shares crash then we are all screwed in the short term obviously. I still believe sky have a future just going to take a little longer.
Thing that gets me is has Netflix managed to turn a profit as last I heard they were screaming through there money even with the growth. If anyone has any figures it would great to know I have looked bit not in awhile. 🙂

[winner69]

Would he belong to the Bowling Club by any chance? :D

No mate .... not classy enough for the bowling club

See's you a guru stock picker I think you I'll get him to contact you :cool:

[Ogg]

After a 5.9 year 97.5% decline in share price, it amazes me that anyone could be optimistic about SKY.

You need to look at the other side of the coin.

You're paying just 2.5% of a business, which in reality hasn't changed much in 5.9 years.

The "6502 processor" that powered computers in 1975 is still being manufactured and sold today, 45 years later!

Satellite TV isn't going away anytime soon.

The capital structure of the company over the last 6 years was the main reason for the collapse.

Tomorrow the stock will reopen under a new capital structure. A fresh start.

The game plan is simple. Maintain the old, but high margin, satellite TV monopoly in NZ. While also, diversifying into new, but lower margin technologies. By bundling these two together there should be a sustainable long term business.

With a clean balance sheet and sufficient liquidity they will be able to fend off competition from Spark and Netflix.

Sky market cap at 17.5c is under $300m. Show me an investment less than that with more value?

[Ogg]

Would he belong to the Bowling Club by any chance? :D

:eek2: Just lol... I've been here too long to get jokes like that.

[mistaTea]

The game plan is simple. Maintain the old, but high margin, satellite TV monopoly in NZ. While also, diversifying into new, but lower margin technologies. By bundling these two together there should be a sustainable long term business.


Agreed, and the revenue stream diversification will bring back optimism for the company over time. I believe this development will have Spark leadership concerned. Especially since they can't really complain like they did when Sky and Vodafone were going to merge.

Average Satellite customers pays ~$80/month. Since these are the customers that will first get the broadband offer...Sky could offer unlimited 100Mbs for, say, $70/month when bundled with the satellite sub.

In other words, the average satellite sub could end up with a Sky entertainment and fibre bundle for $150/month. That is a compelling offer that will help maintain the satellite margins while significantly staunching churn.

Then when Sky GO is standalone and they reach beyond the satellite base, it gets even cheaper since there is no MySky. Customers could have a fibre-Sky GO bundle from as little as $95/month to $170/month for 'the works'.

We have to see how well they execute the strategy of course, but I certainly haven't heard anyone try to argue that this is not the right way to go.

[winner69]

I'll be happy to take his entitlement as I'm going in at 120%.

Don’t blame you .... probably never get them cheaper ...and huge upside.

[Ogg]

That is a compelling offer that will help maintain the satellite margins while significantly staunching churn.


Yep, you could see mega bundles, like unlimited fiber connection + Sky mobile sim cards + lightbox + Sky sports.

Hardware updates could be next. New set top box with everything added in.

Do a few deals with Spotify, and a power company.

One bill for everything.

This is what the commerce commission was worried about. Seems like the only negative is lower prices for everyone.

[mistaTea]

Hardware updates could be next. New set top box with everything added in.


Not sure about that - Martin canned the Infinite Video platform project. I don't believe he is looking to kickstart that again. IV would have allowed customers to consume all content via satellite or streaming.

His plan seems to be finding ways to add more value to satellite customers without any big enhancements (and therefore significant CAPEX) to the set top boxes.

The investable $$$ goes to the new streaming platforms, given that is where the consumer demand is.

You are right that satellite will be around in a meaningful way for a while yet - but it is a sunset distribution model.

Also, if customers want a more modern STB that allows them to stream Sky bundles and more then Vodafone already have a good product for that. Sky could let VTV customers get cheap broadband too provided they subscribe to a Sky TV bundle.

[Baa_Baa]

Don’t blame you .... probably never get them cheaper ...and huge upside.

Hypothetically, at such low market cap, is SKY vulnerable to a takeover and what effect would that have on minority shareholders at such a low share price? Just asking.

It seems Spark might have an interest (broadband and multimedia streaming interests) and could write a cheque out for SKY, likewise Voda/IFT could as well (broadband and STB aggregation streaming). SKY's customer base must be an appealing target to acquire and diversify into either telco's products, twilighting the STB/Dish model and it's costs overheads.

Food for though or just a brain fart?

[mistaTea]

Hypothetically, at such low market cap, is SKY vulnerable to a takeover and what effect would that have on minority shareholders at such a low share price? Just asking.

It seems Spark might have an interest (broadband and multimedia streaming interests) and could write a cheque out for SKY, likewise Voda/IFT could as well (broadband and STB aggregation streaming). SKY's customer base must be an appealing target to acquire and diversify into either telco's products, twilighting the STB/Dish model and it's costs overheads.

Food for though or just a brain fart?

Note that Sky TV's market cap is likely to increase after this deal is done. Current Market Cap= $144M.

SP is probably going to trade @ 20 - 25c (judging by the sell/buy orders that have been put into ASB already). That would be equivalent to a market cap of $333M - $417M post capital raise.

So yes, a takeover is always still possible, but now a buyer would have to pony up more than before the capital raise. Not sure how Spark would get on given the performance and carry on when they complained about Voda-Sky.

And not sure Infratil would want to have a go, given Vodafone failed in 2016. The landscape has changed since then, and I reckon they could get a deal past the Comcom now...but they may be reluctant still.

But sure, a 'new Sky' on more solid footing could attract a buyer.

[winner69]

Note that Sky TV's market cap is likely to increase after this deal is done. Current Market Cap= $144M.

SP is probably going to trade @ 20 - 25c (judging by the sell/buy orders that have been put into ASB already). That would be equivalent to a market cap of $333M - $417M post capital raise.

So yes, a takeover is always still possible, but now a buyer would have to pony up more than before the capital raise. Not sure how Spark would get on given the performance and carry on when they complained about Voda-Sky.

And not sure Infratil would want to have a go, given Vodafone failed in 2016. The landscape has changed since then, and I reckon they could get a deal past the Comcom now...but they may be reluctant still.

But sure, a 'new Sky' on more solid footing could attract a buyer.

Those market cap numbers you mention ...So you saying have a big cap raise and the market rerated you big time.

[mistaTea]

Those market cap numbers you mention ...So you saying have a big cap raise and the market rerated you big time.

Well, we will have to see where the SP settles after the cap raise. It will probably bounce around for a while.

But it seems to me that the SP should settle around the 20c mark at least. That would give it a market cap of $300M or so.

And that is not really a big increase - it would pretty much just be equal to previous market cap + the new money that was injected.

[Baa_Baa]

Those market cap numbers you mention ...So you saying have a big cap raise and the market rerated you big time.

Maybe he's saying the raise is used to pay down debt, so net stronger balance sheet. But yeah, raise at 12 and it doubles overnight to 20-25? Who wouldn't buy at 12 if that was the case! Just seems so desperate, not the shareholders discussing here, but SKY itself.

[winner69]

Has cap raise discussion meant profit downgrade for F20 been put on back burner?

[mistaTea]

Just seems so desperate, not the shareholders discussing here, but SKY itself.

I guess it has come down to Sky not generating enough cash to finance their ambitious growth opportunities AND pay back the maturing bonds. You could describe that is desperate I suppose. The banks would not lend them any more money (without a cap raise as a condition) so yeah, it looks like they really didn't have any other option.

Most of the 'desperation' comments I have read seem to revolve around this apparently 'hugely discounted' cap raise though. As in, they are so desperate to get money they have discounted their shares by 68% to get some money.

That is not actually true. As mentioned earlier, they are effectively raising money at the equivalent of 34c/share (which is roughly what the stock has been trading at). If I was in a bad mood, I would probably describe this offer as cunning.

It allows them to raise the maximum $$$ given the low SP, and also pretty much forces most existing investors to participate (or face oblivion).

[Dlownz]

I don't think that price would hold at this stage. I expect it to trade down lnto as low as 15 cents maybe lower.

[mistaTea]

I don't think that price would hold at this stage. I expect it to trade down lnto as low as 15 cents maybe lower.

You may well be right. But that would still represent a market cap of ~$250M.

If the market behaved rationally, I would have thought a market cap of $300M would make more sense though.

Surely, if the business receives ~$150M new capital (after deducting professional fees for the cap raise etc) then the business would be worth at least that much more than the pre-offer market cap.

[Ogg]

raise at 12 and it doubles overnight to 20-25? Who wouldn't buy at 12 if that was the case! Just seems so desperate, not the shareholders discussing here, but SKY itself.

It doesn't matter what the price was as it was a "pro-rata non-renounceable" entitlement offer. Could have been done at 1c but at 34 for 1.

Goldman probably looked at the trading history and saw that the 52 week low was 19c, so wanted that price, which is about 12c post placement. They only got 4% of the issue anyway.

Doesn't matter if Goldman buys $148m at 12c or if everyone takes up the entitlement.

Doesn't matter how many shares on issue either

What matters is market cap at open.

17.5c looks likely but given that funding is now secured and the broadband announcement, I'm expecting it to trade higher.

I also suspect that the reason it traded up to 48c a couple of weeks ago was because news leaked of this placement.

[mistaTea]

What matters is market cap at open.


Yes, absolutely correct.

And in managements defence, the way they have structured the deal will probably benefit participating shareholders in a big way.

Despite their efforts, they could not hold the SP let alone increase it. No matter what they did - the SP just kept falling. Largely due to sentiment around debt levels etc.

So raising capital to clear the debt burden, if that means 'the market' gives the company another look and decides it is still a viable going concern with a large upside...then this move may well increase the market cap (beyond just the amount of the cash injection) of the business significantly more than if they tried other strategies that did not include the cap raise.

If that makes sense?

Put it this way, if they were to pull this off and the market cap grew to $1B...existing shareholders who participated in the cap raise will be lining up to lick managements asses. They would be heroes.

[mistaTea]

Doesn't matter if Goldman buys $148m at 12c or if everyone takes up the entitlement.



I think this statement is also very important for everyone to understand. Whether or not any existing shareholders take up their entitlements - Sky TV are going to get the $148M.

So there is no question as to whether or not this cap raise will be 'successful'.

As Goldman have underwritten the deal (and therefore guaranteed that they will purchase any entitlements that have not been taken up) the money is now locked in for Sky.

All that remains to be seen is what the participation levels are of existing shareholders. But that is just 'out of interest' - it doesn't make any difference to Sky TV.

[winner69]

I think this statement is also very important for everyone to understand. Whether or not any existing shareholders take up their entitlements - Sky TV are going to get the $148M.

So there is no question as to whether or not this cap raise will be 'successful'.

As Goldman have underwritten the deal (and therefore guaranteed that they will purchase any entitlements that have not been taken up) the money is now locked in for Sky.

All that remains to be seen is what the participation levels are of existing shareholders. But that is just 'out of interest' - it doesn't make any difference to Sky TV.

Forsythe Barr are also underwriters

Have a few client accounts to put the shortfall (if any) in to ...without flooding the market if left with a lot.

[winner69]

I suppose Black Crane will be fronting up with another $7 to $8m ....maybe it was their ‘activism’ that brought this cap raise on?

Wonder what those 2 big shareholders who recently sold down are thinking ...or did they sell at good price to fund the new shares at 12 cents? Aren’t I cynical

[Ogg]

I suppose Black Crane will be fronting up with another $7 to $8m

I was going to email them about this. Their average will be 20c if they do take up their entitlement. They once suggested that OSB and other assets could be sold off to raise funds. They must be pissed that underwriters have bought $9m at 12c but UBS might be a sub-underwriter. An email went around on Thursday saying that demand at 12 was greater than the offer size. Black Crane's thesis hasn't changed, so I assume they will continue buying.

Over the next two weeks there will likely be a lot of SHH notices issued so we'll eventually see what's happening.

I'm confident that the share price will stabilise at around 20 within 2 weeks.

[mistaTea]

An email went around on Thursday saying that demand at 12 was greater than the offer size.

What email?

[Not The Chosen One]

Is there any restrictions apart from holding shares on or before 25 May as it says "eligible" from their statement below?

The Retail Entitlement Offer will be offered to certain eligible retail shareholders with registeredaddresses in New Zealand and Australia at the Record Date of 7.00pm (NZST) or 5.00pm (AEST), onMonday 25 May 2020 (Eligible Retail Shareholders). The Retail Entitlement Offer will open onWednesday 27 May 2020, and close at 7.00pm (NZST) or 5.00pm (AEST) on Tuesday 9 June 2020(unless extended). Provided they have taken up their full entitlement, eligible retail shareholders mayalso apply for additional New Shares not taken up by other retail shareholders up to a maximum of20% above their pro-rata entitlement.

The Offer Document for the Retail Entitlement Offer, containing full details of the Entitlement Offer,is attached to this announcement and will be sent to Eligible Retail Shareholders on Wednesday 27May 2020.

[Ogg]

What email?

An email to fund managers on Thursday morning according to AFR article.

[mistaTea]

An email to fund managers on Thursday morning according to AFR article.

Confirmed in this announcement: https://www.nzx.com/announcements/353636

Doesn't sound like we have much hope of getting the '+ 20%'

[Dlownz]

Confirmed in this announcement: https://www.nzx.com/announcements/353636

Doesn't sound like we have much hope of getting the '+ 20%'

Just as long as they haven't already got there 20% extra.

[winner69]

Just as long as they haven't already got there 20% extra.

If Goldman involved anything can happen

[winner69]

Is there any restrictions apart from holding shares on or before 25 May as it says "eligible" from their statement below?

The Retail Entitlement Offer will be offered to certain eligible retail shareholders with registeredaddresses in New Zealand and Australia at the Record Date of 7.00pm (NZST) or 5.00pm (AEST), onMonday 25 May 2020 (Eligible Retail Shareholders). The Retail Entitlement Offer will open onWednesday 27 May 2020, and close at 7.00pm (NZST) or 5.00pm (AEST) on Tuesday 9 June 2020(unless extended). Provided they have taken up their full entitlement, eligible retail shareholders mayalso apply for additional New Shares not taken up by other retail shareholders up to a maximum of20% above their pro-rata entitlement.

The Offer Document for the Retail Entitlement Offer, containing full details of the Entitlement Offer,is attached to this announcement and will be sent to Eligible Retail Shareholders on Wednesday 27May 2020.

That essentially covers it but you also need to be a chosen one


Sorry mate

[mistaTea]

That essentially covers it but you also need to be a chosen one


Sorry mate

Well, if he doesn't technically qualify he could always phone Mr Stewart and say "I know Kung-Fu...".

Worth a shot anyway.

[see weed]

I don't think so. Record date for the issue is Monday, ie ownership must be registered by then. As trading is currently halted and as settlement for trades is two business days, entitlements will be as per the current register.
Thanks for that information. So it is safe to sell today and still be eligible for the Retail Entitlement offer. It would make sense to sell today. Then use those funds for the 12c offer.

[see weed]

Thanks for that information. So it is safe to sell today and still be eligible for the Retail Entitlement offer. It would make sense to sell today. Then use those funds for the 12c offer.
Or maybe not.

[winner69]

Thanks for that information. So it is safe to sell today and still be eligible for the Retail Entitlement offer. It would make sense to sell today. Then use those funds for the 12c offer.


Free lunch?

[mistaTea]

Or maybe not.

If the average price you paid to acquire your current shares is greater than the current SP, then I think you are better off holding all existing shares if you can and adding your full allotment @12c.

If shares were currently trading at 21c, and you paid on average 19...then you could take the 2c profit today...then buy your full entitlement @12c, and make another profit if the shares stay above 12c after the deal is done (which it most certainly will).

Otherwise, if you paid more than the current SP...you would have to realise a loss today. The break even price of the new shares you buy will then need to be higher than if you kept your existing shares.

[Dlownz]

What's the record for most shares traded in a day for sky

[Ogg]

What's the record for most shares traded in a day for sky

Rupert Murdoch selling 169.8 million shares for $4.80

[uravgtrader]

Hi team, just to confirm, will everyone who has shares in SKT as at 25th May be eligible to take up their share of the 12c per share offer (plus if any remaining, an additional 20%) on Wednesday?

[JohnnyTheHorse]

Price is now low enough that 0.1c fractions are allowed. That's pretty cool.

[Ogg]

Ye olde sell at close and make it red trick.

Piss poor retail holders selling to raise funds at 12c.

Goldman and Co, the same crooks who got wind of the placement (and drove SP to 48c) before everyone else are likely short selling, then using their rights at 12c to cover. Will then pump it back a few days later. Rinse repeat.

Looked solid most of the day. Was trading at 4pm-ish before pre-close @VWAP 20.5c

Need a few weeks for the dust to settle.

[moimoi]

Given the company is starting out afresh by wiping out the equity of its existing shareholders, when does the notification of how many millions of the confetti shares that have been taken up by the Chairman and Directors come through..............?

(If Any)

Before or after the Retail Entitlement Offer closing.?

- Retail holders not responsible for the 2M sell at close. Price fluffed up in the day by Institutional Algo's.

- Mr.T: whats your forecast on when the company gets back to the long distant memory of a $600M Market Cap.? (Being the mid range of FY21 NPAT X 60)

[Balance]

"82% of the Institutional Entitlement Offer and Placement were allocated to existing eligible institutional shareholders. The balance of new Shares were allocated to new investors."

So new investors were allocated $21.456m or 178.8m shares at 12c.

Only 15.7m shares traded today - at closing price of 17c, plenty more stock to come from the new investors who obtained stock at 12c to lock in their 42% profit.

[mistaTea]

- Mr.T: whats your forecast on when the company gets back to the long distant memory of a $600M Market Cap.? (Being the mid range of FY21 NPAT X 60)

Ha! Well, you know by now I am not into the 'predicting' game regarding when a SP may reach a certain level. If one thing is clear it is that I have absolutely no idea how the market will behave!

And I am not alone. Early 2019 Greg Smith predicted the SP would lift to $2/share by the end of this year. Ha! He now predicts it will hit 55c/share post CR in a couple of years. From where we are now, that would be a whopping Market Cap north of $900M!

So with regards to your question about MC of $600M. I have no idea - clearly any continued optimism in Sky's future prospects are going to depend on a number of factors, including:

- Return of all Live Sport, including live crowds in stadia
- Successful release of the merged Lightbox-NEON offering. June or July 2020.
- Successful release of broadband offering. I know the newspapers say 'next year' but the presentation says FY21. So that could be anytime from 1 July 2020. The sooner the better.
- Return of some kind of a dividend - possibly in FY22. So that could be in the second half of next year at the earliest.
- Retaining more of their key entertainment rights

A PE of 15 would be not bullish nor bearish. So to achieve a market cap of $600M, in theory GAAP earnings of $40M would do it. I don't have a crystal ball, and the business is still spending a lot of money on repositioning for growth...but building back to GAAP earnings of at least $40M in a 'reasonable timeframe' does not seem completely lunatic to me.

Though my critics will will say that I have been optimistic about Sky for the last couple of years and the market has disagreed with me the whole time. They would say that only a nut would give me the time of day at this stage!

[Cadalac123]

"82% of the Institutional Entitlement Offer and Placement were allocated to existing eligible institutional shareholders. The balance of new Shares were allocated to new investors."

So new investors were allocated $21.456m or 178.8m shares at 12c.

Only 15.7m shares traded today - at closing price of 17c, plenty more stock to come from the new investors who obtained stock at 12c to lock in their 42% profit.

one the shares are issued and the price spikes to 23c again like it did today, there will be plenty of profit taking to ruin those who actually actually bought this company while it was low. Can't believe directors diluted and ruined these shareholders this blatantly.

[mistaTea]

one the shares are issued and the price spikes to 23c again like it did today, there will be plenty of profit taking to ruin those who actually actually bought this company while it was low. Can't believe directors diluted and ruined these shareholders this blatantly.

Yeah pretty nasty stuff - letting directors and management who have had zero skin in the game this whole time gain shares via a placement @12 cents per share.

It is not lost on me and it does piss me off.

[Balance]

Yeah pretty nasty stuff - letting directors and management who have had zero skin in the game this whole time gain shares via a placement @12 cents per share.

It is not lost on me and it does piss me off.

The 178.8m shares really should have been held over and allotted in the retail pro-rata rights issue.

[Dlownz]

We will still be able to get our full allotment?

[mistaTea]

The 178.8m shares really should have been held over and allotted in the retail pro-rata rights issue.

Agreed. If management never bothered to buy and shares over the last couple of years (and there would have been windows of opportunity) then they shouldn't get to participate now, especially given the way the deal has been structured at 1:2.83.

It is absolute bullsh1t, and a black mark against them unfortunately.

I am not going to die in a ditch over it or anything. It is done now and ultimately I am focussed on the future performance of the business, but it is a good reminder about the rat cunning that can go on in the Board Room.

As investors, we put a huge amount of faith and trust in the people who run our businesses. So it is natural to feel some disappointment in the team when you read about things like this.

[mistaTea]

We will still be able to get our full allotment?

Yes.

It does not affect any of the retail entitlement.

It is just piss-poor that they are able to buy shares at 12c when they don't currently own any. In other words, they will all have likely damn near doubled their money over night once they get their shares because they never owned any shares beforehand that will push their average cost above 12c.

[Balance]

Yes.

It does not affect any of the retail entitlement.

It is just piss-poor that they are able to buy shares at 12c when they don't currently own any. In other words, they will all have likely damn near doubled their money over night once they get their shares because they never owned any shares beforehand that will push their average cost above 12c.

There should have been a minimum holding period for said shares.

Anyway, as you wrote - it is what it is.

[Baa_Baa]

What a shambles, a case study for all investors in regards to their vulnerability when the company they own is faced with oblivion and the behaviour of directors not only to sustain the inevitable but to profit from it. Disgusting.

[winner69]

The really big end of town wins again

One day they’ll get their comeuppance ...and that day might be closer than we think.

[Baa_Baa]

The really big end of town wins again

One day they’ll get their comeuppance ...and that day might be closer than we think.

As the famous saying from Shawshank Redemption, a take on the actual verse "His judgment cometh and that right soon".

[Ogg]

So new investors were allocated $21.456m or 178.8m shares at 12c.



About 10% of issue. Pretty standard. Way less than what you suggested (>20%). Traded way higher than what you thought too (just above 12c).

KMD had more "new investors"

"outside of Briscoe Group which elected not to take up its pro-rata entitlements, eligible institutional shareholders elected to take up 96% of their entitlements"

$8.2m (4% of $207m) + $28m (Briscoe) = $36m "new investors"


There should have been a minimum holding period for said shares.

They could dump now and get 40%. I'm sure they have dumped some today and will dump more over the coming weeks but where will they re-deploy the capital? The market cap at 0.17 is only $280m. At what point is it just giving it away? Besides, Black Crane or another hedge fund will just absorb it anyway.

The "new investors" who dumped KMD at TERP have now missed out on another 40% gain.

SKY has been de-risky substantially, why not hold and sell it down over the coming years.

The dump at close was nothing more than price manipulation. There will be pump and dumps over the coming weeks but eventually it's going to trade 20+ once it's churned enough. Demand at this price level will out strip supply. Like I said, it needs a few weeks to settle.

[moimoi]

""There will be pump and dumps over the coming weeks but eventually it's going to trade 20+ once it's churned enough. Demand at this price level will out strip supply. Like I said, it needs a few weeks to settle. ""

20 cents equates to a market cap of $350M with the wipe out shares allocated.

$350M market cap on a company forecast of net profit for FY21 of $5m - $15M.

Hope your passing the pipe around.

GLTA.

[Ogg]

$350M market cap on a company forecast of net profit for FY21 of $5m - $15M.

GLTA.

1.5% - 4.2% yield

What's wrong with that?

Half the companies on the NZX/ASX probably don't even come close to that.

FY21 will be a tough year for most companies as it's post Covid-19. Sky navigating the situation pretty well. Didn't even ask for the wage subsidy.

[moimoi]

Ya probably need to fact check the wage subsidy comment..

[Ogg]

Ya probably need to fact check the wage subsidy comment..

What are you saying? That OSB took the subsidy?

[moimoi]

"82% of the Institutional Entitlement Offer and Placement were allocated to existing eligible institutional shareholders. The balance of new Shares were allocated to new investors."

So new investors were allocated $21.456m or 178.8m shares at 12c.

Only 15.7m shares traded today - at closing price of 17c, plenty more stock to come from the new investors who obtained stock at 12c to lock in their 42% profit.

But the company told us all today...

""Sky sought to allocate to new institutional investors and existing eligible shareholders who are expected to be aligned to Sky’s long-term business plan to return Sky to growth. As far as Sky is aware, there were no significant exceptions or deviations from those objectives and criteria.""

Surely those " new institutional investors and existing eligible shareholders" (ie: the chosen few) didn't tell porky pies..surely not....!

or is $21M of wipe out shares not meeting the definition of "significant".?

[Ogg]

But the company told us all today...

""Sky sought to allocate to new institutional investors and existing eligible shareholders who are expected to be aligned to Sky’s long-term business plan to return Sky to growth. As far as Sky is aware, there were no significant exceptions or deviations from those objectives and criteria.""

Surely those " new institutional investors and existing eligible shareholders" (ie: the chosen few) didn't tell porky pies..surely not....!

or is $21M of wipe out shares not meeting the definition of "significant".?

Cash is tight. Not everyone can folk out 34 cents a share on short notice during an economic downturn.

You're never going to get 100% take up. Especially on a stock that's been hammered lately.

The point is, the company's future success or possible rebound shouldn't be evaluated on the outcome of the entitlement. It was always going to be a messy raise. It's over now and stock was trading around 20.5 most of the day. Give it a bit of time. Some people need to sell to reload at 12, so that's going to put downward pressure on the stock. There will also be a lot of short term traders and shorters working the stock as a few pips is millions in market cap.

[Balance]

About 10% of issue. Pretty standard. Way less than what you suggested (>20%). Traded way higher than what you thought too (just above 12c).

They could dump now and get 40%. I'm sure they have dumped some today and will dump more over the coming weeks but where will they re-deploy the capital? The market cap at 0.17 is only $280m. At what point is it just giving it away? Besides, Black Crane or another hedge fund will just absorb it anyway.


Pretty standard is normally 3% to 5% of an issue. In this case, the shortfall shares were allotted to 'new' investors, similar to underwriters in effect = 18%. Rather close to 20%, don't you think? rather interesting that the company and underwriters chose to place the shares with 'new' investors rather than leave the shortfall with the underwriters. Effect is same as you now have 18% of shares issued at 12c. But as stated, it could be that the new investors are going to keep their 12c shares for the long term.

New investors cannot sell yet anyway as they will only be allotted their shares & start trading on 2 June. Unless they are shorting the stock.

Retail investors will only get their shares on 16 June - 2 weeks later! So retail investors will have an interesting 2 weeks to watch the price action before they get their allotment and shares.

[moimoi]

What are you saying? That OSB took the subsidy?

OUTSIDE BROADCASTING LIMITED
32 employees
$224,947.20

What are you saying? That Outdoor Broadcasting Ltd isn't part of SKY?

[Ogg]

Pretty standard is actually 3% to 5% of an issue. The shortfall shares were allotted to 'new' investors, similar to underwriters in effect = 18%. Rather close to 20%, don't you think? Effect is same as you now have 18% of shares issued at 12c.

New investors cannot sell yet as they will only be allotted their shares & start trading on 2 June. Unless they are shorting the stock.

Retail investors will only get their shares on 16 June - 2 weeks later! So retail investors will have an interesting 2 weeks to watch the price action before they get their allotment and shares.

I have $9.1m placement + $12.3m shortfall = $21.4m total / by $157m X 100 = 13.6% are "new investors" or 7.5% as a percentage of market cap.

Are we splitting hairs here?

There was shorters working KMD after the placement. Probably derivatives happening too.

https://www.shortman.com.au/stock?q=kmd

As a retail investor you have the advantage of de-risking now then and waiting until June 7. Extremely unlikely it goes sub 12 because of the retail investor allotment.

[Ogg]

OUTSIDE BROADCASTING LIMITED
32 employees
$224,947.20

What are you saying? That Outdoor Broadcasting Ltd isn't part of SKY?

Come on now. You're just throwing stones.

[see weed]

Yippy yi ya :), sold all my shares today.... this morning on open and a bit after at av 22c. Only had them a bit over a week and made about $14,000 loss:D. Lucky I only had 2 small blocks of 40,000. Got caught up in all the hype, you know how it goes. That is the third time this year I have bought into SKT and made a loss, thought third time lucky... but no:eek2:.

[see weed]

Agreed. If management never bothered to buy and shares over the last couple of years (and there would have been windows of opportunity) then they shouldn't get to participate now, especially given the way the deal has been structured at 1:2.83.

It is absolute bullsh1t, and a black mark against them unfortunately.

I am not going to die in a ditch over it or anything. It is done now and ultimately I am focussed on the future performance of the business, but it is a good reminder about the rat cunning that can go on in the Board Room.

As investors, we put a huge amount of faith and trust in the people who run our businesses. So it is natural to feel some disappointment in the team when you read about things like this.
They sound like a pack off Baskets:t_down:

[Ogg]

Only had them a bit over a week and made about $14,000 loss.

How is this even possible?

[see weed]

How is this even possible?
Easy, I paid av price of 40c for 80,000 and sold them for av 22c:cool: ps you can have my Retail Entitlement Offer if you like, don't think I can be bothered with this crap.

[uravgtrader]

Ouch! Why not wait it out?

[see weed]

one the shares are issued and the price spikes to 23c again like it did today, there will be plenty of profit taking to ruin those who actually actually bought this company while it was low. Can't believe directors diluted and ruined these shareholders this blatantly.
Agree, If you did that in some countries, you would get the bullet. Luckily I believe in karma, so am not too worried:)

[ba9]

Easy, I paid av price of 40c for 80,000 and sold them for av 22c:cool: ps you can have my Retail Entitlement Offer if you like, don't think I can be bothered with this crap. I am in a similar situation to you. Can anyone please confirm, if i sell my shares tomorrow, i will still have access to the Entitlement Offer. Thank you.

[Balance]

Easy, I paid av price of 40c for 80,000 and sold them for av 22c:cool: ps you can have my Retail Entitlement Offer if you like, don't think I can be bothered with this crap.

Don't get angry, sw, get even.

Take up your entitlement - all 226,400 of them at 12c - $27,168.

You will have little downside at 12c - more likely, the exuberance by the likes of Ogg could see you get 2c to 3c gain (post allotment) on them before the sp heads back lower - that's still worth $4,500 to $6,800 to offset the loss you have taken so far.

If you can short the stock, that will be even better as it looks like you can get around 17c for them currently - so you recoup $11,300+.

Hate to see anyone take a loss due to the unfair way the capital raising has been done to favor institutions & 'new' investors.

[Ogg]

before the sp heads back

So your saying it's going down to 10c to just $170m marketcap?

Comcast bought Sky UK for circa NZD $55,000,000,000 just 24 months ago.

What would you rather have? Sky UK or Sky NZ 323 times over.

[see weed]

Don't get angry, sw, get even.

Take up your entitlement - all 226,400 of them at 12c - $27,168.

You will have little downside at 12c - more likely, the exuberance by the likes of Ogg could see you get 2c to 3c gain (post allotment) on them before the sp heads back lower - that's still worth $4,500 to $6,800 to offset the loss you have taken so far.

If you can short the stock, that will be even better as it looks like you can get around 17c for them currently - so you recoup $11,300+.

Hate to see anyone take a loss due to the unfair way the capital raising has been done to favor institutions & 'new' investors.
Twenty years ago I would of been angry, but now just take it in my stride:). Have bought 15 blocks of shares since 5/5/20. Two of those blocks where SKT, just took a side step on 12/5/20 for a gamble. Have locked in $49,000 profit after fees and losses since 1/4/20. The other 13 blocks are in a much safer company and are already in the green about $8000, so all good and happy over here. As for SKT, you can have my entitlement offer, I am too busy buying into my next punt;).

[mistaTea]

On the off chance this information is helpful to anyone else, I contacted Sky's investor relations to clarify some details around the process for applying for new shares and payment.

This is the response I got:

"Thank you for your email.

You are correct in saying that the Retail Entitlement Offer will open tomorrow (Wednesday 27th May), and that applications must be made by 5pm (NZST), Tuesday, 9 June 2020. The payment is due by the same time of 5pm (NZST) on Tuesday, 9 June 2020, and is held in trust by Computershare until settlement on the 16th of June which is when the New Shares will be issued to you.

We do strongly recommend direct credit payment to negate any possible delays with cheque delivery and processing."

So it seems that you can apply for your shares online from tomorrow (https://www.shareoffer.co.nz/sky) but only have to make sure the money is sent through by the closing date 09 June. Best to transfer the funds by DC if you can on 08 June I think to ensure there are no issues etc.

Initially I thought that you might have to credit the funds at the same time you submitted the application, but that does not seem to be the case.

Anyway, hope this is helpful.

[uravgtrader]

Sharesies just sent out their email regarding this Rights Offer now and that you can apply for your allocated shares from now until 5th June.

[RupertBear]

Thanks for all your posts mistaTea I have found them very helpful, cheers :)

[Not The Chosen One]

I'm with ASB Securities so if the offer goes through, will they eventually show up in my portfolio on there? Haven't participated in one before.

Thanks

[winner69]

I'm with ASB Securities so if the offer goes through, will they eventually show up in my portfolio on there? Haven't participated in one before.

Thanks

I think you need to add them manually

[mistaTea]

I'm with ASB Securities so if the offer goes through, will they eventually show up in my portfolio on there? Haven't participated in one before.

Thanks

You will need to manually add any new shares you acquire as part of the CR to your brokerage account.

[mistaTea]

Just did a practice run for some shares I hold in a separate brokerage account for my son - 1,000 shares. Not sure if buying Sky shares for him makes me a good father or a bad one! Ha!

Anyway, the process was very straightforward. Applied for the maximum 3,396 for him, and received payment instructions on application submission and then again by confirmation email.

[Ogg]

I contacted Sky's investor relations to clarify some details around the process for applying for new shares and payment.



Send them another email asking if institutional investors have already used up (or been offered) their 20% over subscription entitlement as part of the institutional entitlement offer.

In other words, if there is a shortfall with the retail entitlement, will retail investors who elected to subscribe for an additional 20% effectively obtain the balance from other retail investors. Or will any short fall of the retail entitlement be allocated between both institutional and retail investors combined.

There is a difference, as there's only $38m available. Likely won't be many scraps left over.

[mistaTea]

Send them another email asking if institutional investors have already used up (or been offered) their 20% over subscription entitlement as part of the institutional entitlement offer.

In other words, if there is a shortfall with the retail entitlement, will retail investors who elected to subscribe for an additional 20% effectively obtain the balance from other retail investors. Or will any short fall of the retail entitlement be allocated between both institutional and retail investors combined.

There is a difference, as there's only $38m available. Likely won't be many scraps left over.

I say cut out the middle man and hit them up with any questions you have directly. They tend to reply promptly, and their response may generate more questions from you, so might be easier to have a direct line of communication with them.

Investorrelations@sky.co.nz

[Ogg]

I say cut out the middle man

That's what NBC Universal (Comcast) needs to do. Buy Mediaworks and Sky TV and distribute content direct to NZ.

[mistaTea]

That's what NBC Universal (Comcast) needs to do. Buy Mediaworks and Sky TV and distribute content direct to NZ.

Yep, but no takeovers have been forthcoming so far (much to my surprise) so the likes of NBC don’t see the value perhaps?

If they were going to make a move as you suggest, they wouldn’t want to thumb suck too long. When Sky start to grab a meaningful portion of the broadband market, the takeover price will increase significantly.

[mistaTea]

I imagine all of the ‘new’ Investors coming in @12c would be very keen for a takeover within a few months.

If the shares trade 20c+ after the CR is done, then a premium for control would be 30c+ surely.

Not bad if you can damn near triple your money in short order.

[Ogg]

Yep, but no takeovers have been forthcoming so far (much to my surprise) so the likes of NBC don’t see the value perhaps?

If they were going to make a move as you suggest, they wouldn’t want to thumb suck too long. When Sky start to grab a meaningful portion of the broadband market, the takeover price will increase significantly.

Rumor has it that a sale of Mediaworks TV assets is close to being done, hence why no redundancies were made in the recent restructure.

Will the buyer be an Australian based company, ie SevenWest, Nine, or an American media conglomerate ie Comcast, AT&T, Newcorp, Discovery.

With a strong USD you can pick up overseas assets for a lot less. The larger the company the more efficient the costs are, more vertical integration.

[Ogg]

I imagine all of the ‘new’ Investors coming in @12c would be very keen for a takeover within a few months.

If the shares trade 20c+ after the CR is done, then a premium for control would be 30c+ surely.

Not bad if you can damn near triple your money in short order.

That's what I suspect the plan is by Goldman and their mates.

Exchange the debt (bonds and bank facility) for equity at the expensive of retail holders. Then sell the equity at a premium to a North American media conglomerate.

[Quantitative Easing]

Sky share price down over 80% since Martin has taken over as CEO. He doesn't care about shareholders at all. The dividend payments should have been retained, even if it was as low as 4c/share. Sky is the definition of a penny stock now. Almost makes you want to say, "bring back John Fellet."

[mistaTea]

That's what I suspect the plan is by Goldman and their mates.

Exchange the debt (bonds and bank facility) for equity at the expensive of retail holders. Then sell the equity at a premium to a North American media conglomerate.

Yeah, and I expect Black Crane will have taken their maximum possible entitlement too with a view to influencing the company in such a way that a deal can be done in reasonably short order. If NZR and RP weren't able to take their full entitlement, I am sure BC would have been happy to help them out!

Sky cutting damn near $100M in costs to become a leaner machine, one now with lower and more manageable debt will make it easier for the likes of BC to extract maximum $ from their holding.

I see a bunch of people in Sky Sport are getting the sack. OSB will no doubt be given the flick soon too.

[Cadalac123]

Yeah, and I expect Black Crane will have taken their maximum possible entitlement too with a view to influencing the company in such a way that a deal can be done in reasonably short order. If NZR and RP weren't able to take their full entitlement, I am sure BC would have been happy to help them out!

Sky cutting damn near $100M in costs to become a leaner machine, one now with lower and more manageable debt will make it easier for the likes of BC to extract maximum $ from their holding.

I see a bunch of people in Sky Sport are getting the sack. OSB will no doubt be given the flick soon too.

That’s the thing . It might at one point be worth considering as a value proposition

[uravgtrader]

I see a bunch of people in Sky Sport are getting the sack. OSB will no doubt be given the flick soon too.

Where did you see this?

[Dlownz]

Sky share price down over 80% since Martin has taken over as CEO. He doesn't care about shareholders at all. The dividend payments should have been retained, even if it was as low as 4c/share. Sky is the definition of a penny stock now. Almost makes you want to say, "bring back John Fellet."

John is the reason for this mess.
If he had moved 2 years sooner alot of this could have been avoided. Adapt or die. He wouldn't adapt. Maybe he wanted to extract as much value as he could before he left. Leaving a shell of a former great company.

[mistaTea]

John is the reason for this mess.
If he had moved 2 years sooner alot of this could have been avoided. Adapt or die. He wouldn't adapt. Maybe he wanted to extract as much value as he could before he left. Leaving a shell of a former great company.

Yes and no.

I think it is absolutely true that John was overly cautious on cannibalising his high margin satellite base. And in hindsight, there were many moves that could have and should have been done sooner.

But it is also true to say that John was trying to maximise shareholder earnings in the face of a changing landscape - and he did have an obligation to maximise shareholder wealth, it doesn't necessarily mean he intentionally 'ran the company into the ground' in an attempt to just get one or two more puffs from the cigar butt before he threw the stogie in the gutter and buggered off.
He knew that the launch of OTT providers like Netflix was going to be bad for Sky, and that there would be other entrants over time since it is such a cheap distribution model.

He did release NEON very early on (2015). Unfortunately the first version of NEON was really bad to to use, and he did not put that much content on so that gave the app a bad reputation. So yes, NEON should have had much more focus. Sky GO also needed more updates and faster.

However, in the face of this new reality, John found a fantastic opportunity to merge with Vodafone in 2016. This move was the natural next step for Sky, and would have 'solved' their problems. It was a great deal and would have been awesome for consumers, but alas it was not to be. Some pundits report the merger attempt as a desperate attempt by an old white man who was clueless as to what to do next - but that is not true in my view. It was a well thought out plan that was a win-win for both companies and consumers.

Once that failed, John did do some tinkering (splitting up the Basic package into Starter and Entertainment, launched a Box Set sub for NEON at 11.99/month, and a Mobile-only FANPASS for $15 or so...). However his 'last hurrah' was supposed to be the merger. Once that failed, to be fair to John, he did acknowledge that he was not the best person to lead Sky into the future and they recruited Martin.

Personally, I am a fan of John Fellet and I admire the profitable business he built. He is also a Warren Buffett fan, and would model his shareholder letters in the same way Warren would - and if you go back and read John's letters, they provided a very good education on the media sector (i.e. he did not just give the standard spiel of "we made this much money, this our our EBITDA, growth of x% blah blah blah).

Hindsight is a wonderful thing, and I am sure if we had the opportunity to grab a beer with him and discuss his tenure he would be very candid and point out a number of things he could have done differently. Rightly or wrongly, I am still a fan of his.

[Dlownz]

Sometimes though I think the shares they hold hold more value to them so they gouge the business. Exit and sell the shares before people realise the businesses shape

[mistaTea]

Sometimes though I think the shares they hold hold more value to them so they gouge the business. Exit and sell the shares before people realise the businesses shape

For sure, but John never held a material amount of shares. He only had a couple hundred thousand or so, and he still held them when he left.

Even if he sold them, in relation to his pay packet the $400K worth of shares at the time was not a massive inducement for him I don’t think.

His lack of owning a material amount of shares (as well as the new lot) is a bone of contention though. He needed more skin in the game and so does current management (I just wish they weren’t getting it @12c per share when they never had any skin in the game to start with).

[sb9]

Fellet and team hung onto Sky monopoly situation in NZ far too long without taking notice of emerging online/digital trends in the media and not being proactive. Instead they were just too greedy and now the mess.

[Dlownz]

Has anyone heard if we are guaranteed our full allotment of 2.83 to 1

[Felonius]

Yes and no.

I think it is absolutely true that John was overly cautious on cannibalising his high margin satellite base. And in hindsight, there were many moves that could have and should have been done sooner.

But it is also true to say that John was trying to maximise shareholder earnings in the face of a changing landscape - and he did have an obligation to maximise shareholder wealth, it doesn't necessarily mean he intentionally 'ran the company into the ground' in an attempt to just get one or two more puffs from the cigar butt before he threw the stogie in the gutter and buggered off.
He knew that the launch of OTT providers like Netflix was going to be bad for Sky, and that there would be other entrants over time since it is such a cheap distribution model.

He did release NEON very early on (2015). Unfortunately the first version of NEON was really bad to to use, and he did not put that much content on so that gave the app a bad reputation. So yes, NEON should have had much more focus. Sky GO also needed more updates and faster.

However, in the face of this new reality, John found a fantastic opportunity to merge with Vodafone in 2016. This move was the natural next step for Sky, and would have 'solved' their problems. It was a great deal and would have been awesome for consumers, but alas it was not to be. Some pundits report the merger attempt as a desperate attempt by an old white man who was clueless as to what to do next - but that is not true in my view. It was a well thought out plan that was a win-win for both companies and consumers.

Once that failed, John did do some tinkering (splitting up the Basic package into Starter and Entertainment, launched a Box Set sub for NEON at 11.99/month, and a Mobile-only FANPASS for $15 or so...). However his 'last hurrah' was supposed to be the merger. Once that failed, to be fair to John, he did acknowledge that he was not the best person to lead Sky into the future and they recruited Martin.

Personally, I am a fan of John Fellet and I admire the profitable business he built. He is also a Warren Buffett fan, and would model his shareholder letters in the same way Warren would - and if you go back and read John's letters, they provided a very good education on the media sector (i.e. he did not just give the standard spiel of "we made this much money, this our our EBITDA, growth of x% blah blah blah).

Hindsight is a wonderful thing, and I am sure if we had the opportunity to grab a beer with him and discuss his tenure he would be very candid and point out a number of things he could have done differently. Rightly or wrongly, I am still a fan of his.

Thank you mistaTea.

This was a balanced & well-informed summation.
I appreciate you effort to enlighten us all.

[mistaTea]

Thank you mistaTea.

This was a balanced & well-informed summation.
I appreciate you effort to enlighten us all.

Appreciate the comment Felonius. I should point out (before I get trolled) that John is not my dad or any other kind of relation. He is not a family friend, and I have never had the opportunity to meet the man.

I just think that people tend to have 20:20 hindsight vision, and look back with a very 'black and white' view of events. The reality is there are a lot of grey areas, and if one put themselves in the CEO position at the time - you would realise that there were no easy decisions.

Maybe one day I will get the opportunity to watch a baseball match and chow down an American hotdog with John. Oh how I would love to pick his brain...

[Balance]

Appreciate the comment Felonius. I should point out (before I get trolled) that John is not my dad or any other kind of relation. He is not a family friend, and I have never had the opportunity to meet the man.

I just think that people tend to have 20:20 hindsight vision, and look back with a very 'black and white' view of events. The reality is there are a lot of grey areas, and if one put themselves in the CEO position at the time - you would realise that there were no easy decisions.

Maybe one day I will get the opportunity to watch a baseball match and chow down an American hotdog with John. Oh how I would love to pick his brain...

Or what's left of it?

[Quantitative Easing]

Good assessment mistaTea. John Fellet gouged the customers to look after the shareholders. But he put shareholders at number 1. Part of the reason why Sky is valued piss all is because the market does not have a whole lot of faith in Martin. He might be good for customers and sports bodies but he is not good for shareholders. Best we can hope for now is a takeover. The next best would be resumption of dividends.

[Entrep]

Good Fellet post mistaTea

[Ogg]

Freakin La La Land at the moment.

Still in the green tho.

Like I said, needs a few weeks to settle.

[Cadalac123]

Probably get dumped a little for the next few days or week or so

[Balance]

Probably get dumped a little for the next few days or week or so

New investors & institutions will be allotted their shares & start trading on 2 June. So next week will see what they are going o do with their 12c shares.

Retail investors however will only get their shares on 16 June - 2 weeks later!

So retail investors will have an interesting 2 weeks to watch the share price action before they get their allotment and shares.

[Ogg]

New investors & institutions will be allotted their shares & start trading on 2 June. So next week will see what they are going o do with their 12c shares.

Retail investors however will only get their shares on 16 June - 2 weeks later!

So retail investors will have an interesting 2 weeks to watch the share price action before they get their allotment and shares.

See latest announcement.

Though the power of black magic, Morgan Stanley have already got ownership of the new shares and have loaned them back to their clients, on margin, to trade at free will. So effectively the new shares are being traded now.

[Balance]

See latest announcement.

Though the power of black magic, Morgan Stanley have already got ownership of the new shares and have loaned them back to their clients, on margin, to trade at free will. So effectively the new shares are being traded now.

Hence, the sell down being witnessed - the 1m odd shares bid at 15c must be looking attractive for a quick 25% profit. Not a bad day's work for the 'new' committed long term shareholders?

[Ogg]

Hence, the sell down being witnessed - the 1m odd shares bid at 15c must be looking attractive for a quick 25% profit. Not a bad day's work for the 'new' committed long term shareholders?

It's all price manipulation, designed to screw over retail investors.

Like I said, give it 2 weeks.

For the record, I'm going in at 120% of my entitlement. $61k.

[Balance]

It's all price manipulation, designed to screw over retail investors.

Like I said, give it 2 weeks.

For the record, I'm going in at 120% of my entitlement. $61k.

You should take up see weed’s entitlement? He has offered it.

[winner69]

See latest announcement.

Though the power of black magic, Morgan Stanley have already got ownership of the new shares and have loaned them back to their clients, on margin, to trade at free will. So effectively the new shares are being traded now.

Only BUY recently and no new 12 cent shares on that notice

Do you know they are lending?

[Ogg]

You should take up see weed’s entitlement? He has offered it.

If only I could.

Hopefully there's enough "see weeds" out there to create a 20% shortfall.

[Ogg]

Only BUY recently and no new 12 cent shares on that notice

Do you know they are lending?

$3,000,000.00 for 25,000,000 Ordinary Shares, 25th May.

Or am I reading that wrong?

[winner69]

$3,000,000.00 for 25,000,000 Ordinary Shares, 25th May.

Or am I reading that wrong?

Yep 12 cent ones

Might still have them?

[blackcap]

New investors & institutions will be allotted their shares & start trading on 2 June. So next week will see what they are going o do with their 12c shares.

Retail investors however will only get their shares on 16 June - 2 weeks later!

So retail investors will have an interesting 2 weeks to watch the share price action before they get their allotment and shares.

That is why I went short SKT with my CFD provider a few days ago at 19 cents and again yesterday at 18.8 cents. That way you get ahead of the inevitable wave.

[Ogg]

That is why I went short SKT with my CFD provider a few days ago at 19 cents and again yesterday at 18.8 cents. That way you get ahead of the inevitable wave.

This is why the stock will bounce back to 20 in a couple of weeks at the expensive of the "see weeds".

[Ogg]

https://www.youtube.com/watch?v=CWWqyrUkT_U

[blackcap]

This is why the stock will bounce back to 20 in a couple of weeks at the expensive of the "see weeds".

Don't get me wrong, I am taking up my entitlement at 12 cents and will get out of my short as well. But its the retail investors that get screwed because many will panic and not take up their 12 cent rights and the underwriter will go thank you very much.

[Ogg]

That way you get ahead of the inevitable wave.

As far as I can see, the shares have effectively been trading "post issue" since Tuesday.

Settlement is 2 days plus trade.

New shares get issued tomorrow.

Sophs have been trading contracts, not the shares.

How else do you get 10m volume daily on here.

Pure manipulation.

[flyer]

The whole thing has been a crock of ****. Us retail holders who really NEED TO participate do not get their shares to June and then by then the share price will probably be under 10c at the rate its going- not happy.

[Yoda]

Do you think some retail investors will be selling today at 15 and then buyback this week or 12? Might that have a connection on the downward share price today?

[Quantitative Easing]

We have till 9th of June to decide. Who knows it might be less than 12 cents/share by then.

[EBITDA]

I have no idea why a 2.83:1 issue at a third of the price is even legal. What a bloodbath.

[moimoi]

Do you think some retail investors will be selling today at 15 and then buyback this week or 12? Might that have a connection on the downward share price today?

Retail investors don't have the computing power to affect the price nor the recent unusual volumes. Morgan Stanley via todays SSH notice does however...

[Balance]

How else do you get 10m volume daily on here.

Pure manipulation.

I think it's just 'new' investors taking their very nice 25%+ quick profit, courtesy of a grossly unfair capital raising structure in favor of institutions.

Remember that there are 178m shares issued to new investors at 12c.

In their shoes and in the market conditions we are in, who can blame them for taking their profits?

The issue should be like they were in the old days - a pro-rata issue to ALL shareholders at the same time.

It's clear that the structure is to suit the company, underwriters and institutions - bugger the small shareholders.

[Balance]

Retail investors don't have the computing power to affect the price nor the recent unusual volumes. Morgan Stanley via todays SSH notice does however...


Retail investors actually account for 24% of the $157m to be raised so they hold 105m of existing shares, before the rights issue.

It is entirely possible that some may be selling to pay for the rights at 12c.

[mistaTea]

Retail investors actually account for 24% of the $157m to be raised so they hold 105m of existing shares, before the rights issue.

It is entirely possible that some may be selling to pay for the rights at 12c.

Yes I suspect there will be a reasonable element of that.

It is frustrating how some of these institutions and insiders are going to benefit from the deal.

However, remember your circle of influence and circle of concern!

I’ve noted the injustice. I’m not particularly impressed. But I’m not going to dwell on it because it doesn’t really help me.

[Cadalac123]

The whole thing has been a crock of ****. Us retail holders who really NEED TO participate do not get their shares to June and then by then the share price will probably be under 10c at the rate its going- not happy.


I somehow doubt it’ll go to 10c but if it does you can get an even better deal

[King1212]

still can not believe it that anyone would buy SKT shares....:eek2:

[Balance]

I somehow doubt it’ll go to 10c but if it does you can get an even better deal

How?

The rights issue is set at 12c.

[Ogg]

Let's get things in perspective people!

The Kathmandu TERP was NZ$0.72. It traded down to $0.62 (13% drop)

The Sky TV TERP was $0.17 and it's now down to 14.6 (14% drop)

Kathmandu also opened strongly after the placement and traded down in a similar pattern to Sky TV.

The overhang stock on Kathmandu was eventually absorbed by new institutional investors, Norges Bank etc

The point is, is that this is very normal trading behavior. There's too much downside pressure with all the shorting and short term profit taking going on.

Give the stock time to churn and it will bounce back strongly once all the weak hands have been shaken out.

I keep saying give it time. 2 weeks minimum. By mid July it will be 21+. You read it here first.

[Ogg]

still can not believe it that anyone would buy SKT shares....:eek2:

People will buy anything if you put a price on it.

Just $254m market cap at today's closing price.

Only $11m debt.

2021 EBITDA forecast range of $100–130m

Sky is a household name in New Zealand. It's a profitable business. Over 1 million customers. Many bandits have falsely called the end of the company for many years but have been wrong. A major restructure of the capital has just occurred. Very interesting time to be an investor. Comcast recently bought Sky UK for $39B. Active investors like Black Crane have entered stock recently and see potential. If this doesn't get you excited then nothing will.

[King1212]

If it is so rosy..then the SP won't be falling everyday....since the last 5 years.....please....

[Ogg]

Here's an extract from two Kathmandu SSH.

https://i.imgur.com/YOMHs5E.jpg

It shows Morgan Stanley purchasing 2 million shares at 50 cents on the 2nd of April from the institutional placement.

Derivative contracts are then created with clients the same day. Effectively stock is borrowed and sold on market instantly, using collateral from the parent company.

Kathmandu resumes trading at around TERP. Over the coming days the stock drops as shorts are sold to new unsuspecting retail holders.

Kathmandu drops to 60.

Retail clients began to sell, and are less likely to participate in entitlement offer.

Stock is then repurchased on market at a discount and returned to Morgan Stanley on the of 9th April.

Traders then began to build a net positive position.

Retail entitlement is underwritten.

Morgan Stanley releases research report and "buy" recommendation.

Stock surges to $1.

Retail holders left wondering what the hell happened.

[Ogg]

Typo above, actually 4m shares at 50c for $2m.

This is just one company (Morgan Stanley), who happened to go over 5% and had to disclose. Doesn't count all the other institutional firms doing the same thing under the table with Kathmandu.

Take a look at shortman:

https://www.shortman.com.au/stock?q=kmd

1/3 of the company was sold short just after the placement. That's absolutely ridiculous.

Moral of the story is that Mr. Market is irrational.

I don't care if the stock drops below 12. I'm still going 120% in the entitlement.

[mistaTea]

I hope I can get 120% too...

[mistaTea]

https://www.google.co.nz/amp/s/www.nrl.com/news/2020/05/28/nrl-announces-new-broadcast-deal-with-nine-foxtel/Amp/

I expect Sky to negotiate similar broadcast extensions for NRL, rugby etc.

Sky will agree to a smaller clawback than they are entitled to so that the codes remain viable.

In return the codes commit to an extension on reasonable terms.

[blackcap]

Typo above, actually 4m shares at 50c for $2m.

This is just one company (Morgan Stanley), who happened to go over 5% and had to disclose. Doesn't count all the other institutional firms doing the same thing under the table with Kathmandu.

Take a look at shortman:

https://www.shortman.com.au/stock?q=kmd

1/3 of the company was sold short just after the placement. That's absolutely ridiculous.

Moral of the story is that Mr. Market is irrational.

I don't care if the stock drops below 12. I'm still going 120% in the entitlement.

However if you type SKT into shortman, it shows that SKT is not short at all... https://www.shortman.com.au/stock?q=skt

Might be one to keep an eye on in the coming days though.

[huxley]

In an environment where most shares have rallied 30% plus since March, it’s amazing watching the confirmation bias going on here!!

[Stranger_Danger]

In an environment where most shares have rallied 30% plus since March, it’s amazing watching the confirmation bias going on here!!

30%?

A debt free, profitable, dividend paying, low production cost gold miner like Evolution is up a lot more than that, selling a product for which demand is increasing, while the outlook for costs like labour and oil look as good as they have in ages.

A nearly debt free, profitable, dividend paying company like Kogan.com is up well over 100%, with a tailwind behind them and demand increasing and their distribution method becoming just as popular as it is cost efficient.

In neither case does the supplier sell a product where you can shift to a free version and get better selection and service than you got from the paid incumbent, who continues to dinosaur their way through life with an expense structure completely out of whack with the younger buyers' price expectations and a content distribution model that simply makes no sense in 2020.

[percy]

Great post Stranger Danger.

[Ogg]

However if you type SKT into shortman, it shows that SKT is not short at all... https://www.shortman.com.au/stock?q=skt

Might be one to keep an eye on in the coming days though.

There's a 9 day lag.

[Ogg]

A nearly debt free, profitable, dividend paying company like Kogan.com is up well over 100%, with a tailwind behind them and demand increasing and their distribution method becoming just as popular as it is cost efficient.


Kogan, just lol.

Kogan was OK 10 years ago but only because it gained a huge following as people used it to avoided GST. It's a dodgy company with dodgy owners. They went public so founders could sell down which they have been doing. It continues to do all these acquisitions and horizontal moves into new product lines but it's all an excuse for lack of actual growth. Total bubble and receipt for disaster.

[blackcap]

Seems like UBS has been shorting a few....

https://www.nzx.com/announcements/353928

[Stranger_Danger]

Kogan, just lol.

Kogan was OK 10 years ago but only because it gained a huge following as people used it to avoided GST. It's a dodgy company with dodgy owners. They went public so founders could sell down which they have been doing. It continues to do all these acquisitions and horizontal moves into new product lines but it's all an excuse for lack of actual growth. Total bubble and receipt for disaster.

I actually agree with you. Kogan was carefully chosen as my example as it is NOT perfect. When comparing against Sky TV, it would be cruel to use Netflix or Apple or something.

I entered Kogan at under $5.00. In my analysis, I had just as many "cons" as "pros" - record of insider selling, record of CEO being a spinner, Amazon threat, technology stack dated etc etc.

However, the positives coupled with the likely operating and competitive environment (eg "the world outside", which is why Sky is doomed) along with a reasonable price allowed a purchase.

My return expectation was 100% over five years, or 15% per annum compounded annually, plus dividends.

Some aspects of my thesis started to play out (or at least be noticed and priced in) far quicker than expected.

The CEO and 2IC then gave themselves a truly disgraceful options package using the Covid19 "panic" period to gift themselves a swag of options at $5.30 or so when the share price was nearly $9.00, the only performance criteria being to stick around, redirecting a lot of the future upside to themselves.

The momentum crowd continued to bid the shares up. I exited this week at over $10.00, my return expectations more than met very quickly, and the "key man" risk proving out even earlier than expected!

Kogan.com is NOT perfect - miles off it. But you could construct a list of rational pros that allowed a purchase.

I simply can't do that with Sky.

P.S See how I sold when an identified risk showed up? You're allowed to sell, Sky TV folk...

[Quantitative Easing]

Mind you ASX runs on sentiment rather than fundamentals. Look at Afterpay and other BPNL stocks.

[mistaTea]

I simply can't do that with Sky.


Well, it is a good thing you don't own any SKT shares then. Nothing for you to get hot and bothered about mate.



P.S See how I sold when an identified risk showed up? You're allowed to sell, Sky TV folk...


My underlying thesis for Sky has not changed. In fact the company's financial performance and subscriber growth has exceeded my assumptions (so far).

Of course, if the 'story' for Sky changes for the negative then I will sell my shares. Even if that means I have to realise a loss. Just like Buffett did recently with the airlines.

[k14]

Seems like UBS has been shorting a few....

https://www.nzx.com/announcements/353928
Can you explain how that indicates they are shorting? Reading the notice it states their holding has gone up?

[Cadalac123]

Well, it is a good thing you don't own any SKT shares then. Nothing for you to get hot and bothered about mate.



My underlying thesis for Sky has not changed. In fact the company's financial performance and subscriber growth has exceeded my assumptions (so far).

Of course, if the 'story' for Sky changes for the negative then I will sell my shares. Even if that means I have to realise a loss. Just like Buffett did recently with the airlines.

Free cash flow generating company with heavy revenue and cash
Now debt lid significantly reduced albeit by screwing over shareholders

I can actually see some value here especially at 12c

[blackcap]

Can you explain how that indicates they are shorting? Reading the notice it states their holding has gone up?

Sorry should clarify, they themselves maybe not shorting but allowing stock to be used for shorting... (borrowing rights)

page 3 etc

[Ogg]

Can you explain how that indicates they are shorting? Reading the notice it states their holding has gone up?

It's not actually shorting.

The parent company has bought stock in the 12c placement.

It has then lent the stock out, to a borrow, at interest. Who? Nobody knows.

You can only assume it's being sold on market as the volume of the stock surges, and the price drops by millions.

You get 4 business days plus a trading day before you have to report anything to ASIC. Throw in a weekend and then report at the end of the last business day and it's more than a week before anybody knows what the hell is going on.

That's not the worst part. The borrower and lender are related. It's like doing the above but with your Dad.

[Ogg]

O look, the stock is up, what a surprise.

[blackcap]

That is a heck of a lot of stock being offered at 15 at the close today. Monday will be interesting.

[Cadalac123]

Will probably drop monday. Friday will be interesting though

[blackcap]

Will probably drop monday. Friday will be interesting though

Which Friday are you referring to?

[Cadalac123]

Which Friday are you referring to?

Next Friday

[Ogg]

That is a heck of a lot of stock being offered at 15 at the close today. Monday will be interesting.

The large institutional parent companies have instructed their traders to keep the price of SKT suppressed during the retail entitlement phase, so that a shortfall arises and additional shares can be underwritten.

This is what happened with Kathmandu. It was artificially manipulated by excessive short selling.

It's a fact that only 51% of the retail shareholders of Kathmandu elected to take up their entitlements, luckily it was 82% after over subscriptions. Even so, this still created a shortfall of 19 million shares. These 19 million shares have generated an additional $10m in profits for institutional holders who underwrote the shortfall.

I suspect more shorting on SKT next week. I also suspect an approx 40% shortfall in the SKT retail entitlement if the price continues to stay suppressed at these levels. This doesn't actually bother me as it greatly increases my odds of getting 120%. Sub 12 would be nice, but 15 should be more than enough to achieve it.

[Cadalac123]

The large institutional parent companies have instructed their traders to keep the price of SKT suppressed during the retail entitlement phase, so that a shortfall arises and additional shares can be underwritten.

This is what happened with Kathmandu. It was artificially manipulated by excessive short selling.

It's a fact that only 51% of the retail shareholders of Kathmandu elected to take up their entitlements, luckily it was 82% after over subscriptions. Even so, this still created a shortfall of 19 million shares. These 19 million shares have generated an additional $10m in profits for institutional holders who underwrote the shortfall.

I suspect more shorting on SKT next week. I also suspect an approx 40% shortfall in the SKT retail entitlement if the price continues to stay suppressed at these levels. This doesn't actually bother me as it greatly increases my odds of getting 120%. Sub 12 would be nice, but 15 should be more than enough to achieve it.

Same pattern i've noticed a lot too. Obviously some variability though, but majority of times this tends too happen. Buying before the settlement date of the institutional shares is also the highest risk time

[Balance]

That is a heck of a lot of stock being offered at 15 at the close today. Monday will be interesting.

Indexing - MSCI

[Ogg]

https://www.asx.com.au/data/shortsell.txt

2m shorts yesterday. Suspect more in derivatives, swaps and other instruments. Likely 10m shorts today. We won't know the full picture until 8 days later on shortman. Safely assume 80% of trades now are fake and short selling.

[mistaTea]

This doesn't actually bother me as it greatly increases my odds of getting 120%. Sub 12 would be nice, but 15 should be more than enough to achieve it.

Too right, fingers crossed. Just finalised my application today by making payment (required a trip to the branch as I couldn’t process it online myself).

Have applied for ~1.2M new shares in total.

[Baa_Baa]

Too right, fingers crossed. Just finalised my application today by making payment (required a trip to the branch as I couldn’t process it online myself).

Have applied for ~1.2M new shares in total.

Gee I truly hope it works out for you, that’s a sizeable chunk on top of your existing holding to have in one company with an almost 6 year track record of shareholder wealth destruction.

I honestly do hope it works for you, though it’s way too risky for me. All the best.

[Ogg]

Have applied for ~1.2M new shares in total.


https://www.youtube.com/watch?v=1F46zm23VyI

[mistaTea]

https://www.youtube.com/watch?v=1F46zm23VyI

That is exactly what I did with the person at the Branch when making the transfer!!!

[Dlownz]

http://www.stuff.co.nz/sport/league/warriors/300024434/sky-tv-opens-up-free-access-to-sporting-saturday-warriors-game-is-on-us?cid=app-android

Great promotion from sky. Just need to get it out there.

[Dlownz]

http://www.stuff.co.nz/sport/league/warriors/300024434/sky-tv-opens-up-free-access-to-sporting-saturday-warriors-game-is-on-us?cid=app-android

Great promotion from sky. Just need to get it out there.
And what I mean also is rather than put it on prime live. get people to download the app and allow 24hours free access to show what it's all about.

[Not The Chosen One]

I agree. Saw a deal for half price sports now I was thinking of getting. Today will help me decide if I go through with it. Love my league and with rugby also starting up, I have my fingers crossed it doesn't have any issues with potentially a large number trying it out today

[Dlownz]

I use sky go and neon. Huge improvement from a few years ago. Biggest thing is the casting function so it doesn't have to be on your phone

[mistaTea]

I use sky go and neon. Huge improvement from a few years ago. Biggest thing is the casting function so it doesn't have to be on your phone

Yeah both products are a lot better now. NEON is still not as good as Netflix (they have set the bar) but it is definitely better than the 'bad old days'.

If you are not a Sports fan, you can currently get a very comprehensive entertainment package from Sky for $65.44/month ($2.15 per day).

Sky Starter + Entertainment from Vodafone TV (which means no MySky fee) = $51.49 per month. That provides a very large range of entertainment, kids channels, documentaries and news channels.

Then you can add NEON for $13.95 which pretty much gives you SOHO + Sky Movies. The NEON app on VTV works well.

Thats what I have + Sky Sport. My total package is $97.43/month (which works out to be about $3.20 per day). Less than a cup of coffee and there is something for everyone in my household. We utilise a lot of the content on offer.

[winner69]

Bidding SKT to over 40 cents and then a rights issues and supposedly zillions being shorted and it seems wholesale market manipulation going on I just keep up.

Question .is this a game everybody wins and no losers ....meaning I’m missing out on the fun.

Or are one or two making zillions while everybody else loses heaps

[mistaTea]

Just reading a piece on Trustpower...

"More than 50% of Trustpower’s customers now take more than one utility service, and the more than 100,000 broadband customers reflects both the quality of the network offered by Trustpower as well as price."

If Sky could get 50% of satellite subs to take up Sky Broadband as a starting point, that would be over 250,000 Broadband customers. Not a bad start, and I expect a fibre-entertainment bundle would be more appealing that an fibre-utility bundle.

And then there is large room for growth beyond the satellite base of course.

[Ogg]

Bidding SKT to over 40 cents and then a rights issues and supposedly zillions being shorted and it seems wholesale market manipulation going on I just keep up.

Question .is this a game everybody wins and no losers ....meaning I’m missing out on the fun.

Or are one or two making zillions while everybody else loses heaps

It's simple really.

Given the EBITA and market cap, you win if the company survives the next 1825 days (5 years).

So if in the year 2024 everyone is streaming the Paris Olympics then you lose.

I'm betting that nothing significant will happen in 1825 days. Just like nothing significant happened in the last 1825 days.