SKT Sky Network Television Limited.

[winner69]

That's a relief MrT - feels better being in the green eh

Almost a double bagger for me ...one day soon I hope

[Sideshow Bob]

Wow! Up 19% overall today! Never thought I'd see the day after buying in 2 and a half years ago.

Just up 10c, circa 4% today?? :confused:

[mistaTea]

Just up 10c, circa 4% today?? :confused:

At least now we can rest assured that, at these levels, any takeover offers need to be $3.50+/share to have a chance of getting approval. Might even need to be $4...and the higher the SP goes as we approach Feb, the higher the For Sale price becomes.

Sophie mentioned there was still interest in Sky...if the interest is only from vultures then I think their interest has dissipated.

But for anyone else who can see the long term value, or if acquiring Sky is a good strategic fit (i.e. to form a telco) then paying a fair price should be no issue at all.

[mistaTea]

That's a relief MrT - feels better being in the green eh

Almost a double bagger for me ...one day soon I hope

It sure does - though when I look back now it really does feel like the past 4 years has whizzed by. I never bothered checking the SP all the time before, which helped.

And it is good to see the positive movement at this stage, as I decided that after my last purchase in November I would stop buying for a few months at least - so am fully invested.

SP would need to increase by another 50% from here to get to a PE that seems reasomable, especially cosidering the imminent property sale and cash infusion.

That would value the shares at ~$4 a pop.

[mistaTea]

I find myself peeking a lot more now though!!

A new high of $2.64!

[JohnnyTheHorse]

I find myself peeking a lot more now though!!

A new high of $2.64!

No point checking the price too often (unless you're planning on selling). What really matters is the price at the end of Feb, which I'm fairly confident will start with a 3. Patience will continue rewarding.

[Meh]

Now $2.65!!!!!

[mistaTea]

No point checking the price too often (unless you're planning on selling). What really matters is the price at the end of Feb, which I'm fairly confident will start with a 3. Patience will continue rewarding.

Oh yes I agree 100%.

I am breaking my usual rule for a 'bit of fun' after so long to get it out of my system.

No intention to act on any changes in quoted value right now...two interesting events to happen in the short term:



Campus sale - interesting to see who purchased it and, of course, how much money we are being paid?
Feb 24. What additional growth opportunities are there for Sky now that she is flush again? How much capital can be returned to shareholders? How will it be returned?

[mistaTea]

Now $2.65!!!!!

$2.66!!!!!!!!!!!!!!!!!

[Balance]

$2.66!!!!!!!!!!!!!!!!!

Stop it, mistaTea! Please!

It may get up $2.70 by day’s end if you keep this up.

[The Punter]

Geeezzzz Ive got a nice problem/headache...bought in at 14.5c ($1.45) and keep tossing a coin as to sell now or not...

[LoungeLizzard]

Jeez, as much as I was happy for Ogg to make his 6 figure profits and call it quits, it did seem at the time that he was jumping the gun. There's a lot of money he left on the table and a hell of a lot more come February.

[mikelee]

Spare a thought for those that sold at a loss before the profit update! :(

[Meh]

Gotta have these Diamond hands to make a profit mikelee!

[mistaTea]

Spare a thought for those that sold at a loss before the profit update! :(

That has got to be the worst luck :(

[mistaTea]

Jeez, as much as I was happy for Ogg to make his 6 figure profits and call it quits, it did seem at the time that he was jumping the gun. There's a lot of money he left on the table and a hell of a lot more come February.

We should take wagers to see if he has been commited by his family to the Funny Farm yet.

The never ending price increase since he sold will have broken his mind...

[mistaTea]

Stop it, mistaTea! Please!

It may get up $2.70 by day’s end if you keep this up.

$2.67!!!! !!!!!!!! !!!!!!!!

[LoungeLizzard]

$2.68!!!!!!!!!!

[mistaTea]

$2.67!!!! !!!!!!!! !!!!!!!!
$2.68!!!! !!!!!!!! !!!!!!!!

[mistaTea]

$2.68!!!!!!!!!!

I just caught myself throwing my head back and laughing like a maniac.

Oh boy!

[LoungeLizzard]

I want to marry Sophie:t_up:

[The Punter]

...I bet Mrs Tea is having trouble walking...just saying...

[Almost-confused]

Haha this is good fun. Deep in the green now. The risk of making a loss is gone and now it's a decision as to how much profit to book. All great problems to have

[mistaTea]

You know, at the low point...when the pandemic hit and Sky was knocked harder than everyone else...there was a point where I was down around 90% on a $500K or so investment. Do you have any idea how much ice I needed to to have in my veins to shrug that off?

-90%

To be up $30K now and climbing is a nice change from the depths I have seen!

[LoungeLizzard]

We're there....$2.70!!

[sb9]

$2.68!!!! !!!!!!!! !!!!!!!!

$2.70.....

[Almost-confused]

Ouch. Good hold

[mistaTea]

Stop it, mistaTea! Please!

It may get up $2.70 by day’s end if you keep this up.

Your wish is my command!

[LoungeLizzard]

You know, at the low point...when the pandemic hit and Sky was knocked harder than everyone else...there was a point where I was down around 90% on a $500K or so investment. Do you have any idea how much ice I needed to to have in my veins to shrug that off?

-90%

To be up $30K now and climbing is a nice change from the depths I have seen!

Hats of to you sir! Those aren't diamond hands - they're adamantium!

[Sideshow Bob]

I just caught myself throwing my head back and laughing like a maniac.

Oh boy!

Well deserved after finally hitting green. Good on ya!

[sb9]

That has got to be the worst luck :(

Can't remember the member name, but someone on here did sell literally few days before. And they did mention 'watch it go up soon after I sell'....feel sorry for him/her.

[Almost-confused]

We're making a run for the top gainer of the day on the NZX. Come on SKT

[Sideshow Bob]

Geeezzzz Ive got a nice problem/headache...bought in at 14.5c ($1.45) and keep tossing a coin as to sell now or not...

In the meantime, just keep tossing the coin.......

[Meh]

Cheers for your sacrifice.

[Meh]

I sold all my shares today, took at 50%+ hit, thanks guys been great entertainment.

Watch it moon tomorrow, 100% it'll.

^^^^^^^^^^^^^^^^

[Almost-confused]

^^^^^^^^^^^^^^^^

😭 Nooooooooo

[The Punter]

Gotta feel for Akane... ..'Been there, done that' many years ago with A2 Milk-bought for 10c, sold a few months later for 10c..makes for a jagged rock under the old beach towel.

[mistaTea]

I sold all my shares today, took at 50%+ hit, thanks guys been great entertainment.

Watch it moon tomorrow, 100% it'll.

That is heart breaking.

And I see he is Banned too.

Maybe the admins booted him for doing such a bad trade :eek2:

[mistaTea]

My 2yo has much better timing for his portfolio than his old man.

Over time 'he' bought $4800 worth of Sky shares. They are now worth $6500 - a cool 34% gain.

He is just lucky he is cute and I love him so much :D

[Captain Ramjet]

I wouldn't be surprised if this is the market pricing in the property sale and we see a slight retraction in share price once the actual sale figure comes out. For my part I'm up 89% and have sold today to recoup my initial investment. That still leaves a lot on the table and everything from here is gravy...and I love gravy!

[SausageDog]

I don't post much, but have really enjoyed this thread over the last 2 years. I bought into Sky in October 2019 and like misteTea , watch this sink like a stone, I made every investing mistake as a newbie (catching falling knives and doubling down). I ended up have 4 times as much invested in Sky trying to average down. I ended up at 17.7c average purchase price having bought my first block at 109c. I now have a large chunk in Sky and am sitting on a 40% gain. I've been lucky, and made a few bad calls. I have learnt a lot from you all on her including OGG. I've read and listened to what a lot of you have said and some of it has stuck. Thank you all for you entertainment and sometimes wisdom on here, its kept me sane and kept me calm and luckily staying the distance. What i have learnt the most is that I now know what I DON'T KNOW!!! and investing can be fun. :t_up:

Am i selling, not any time soon, there is more to be enjoyed here. thanks mistaTea!

[uravgtrader]

Dayum, a bit of a drop there for the final minutes!

[Balance]

Dayum, a bit of a drop there for the final minutes!

Good finish up 10c to $2.62 - let profit takers supply stock to institutions who probably need millions of shares to get set for the next big leg up.

[mistaTea]

Good finish up 10c to $2.62 - let profit takers supply stock to institutions who probably need millions of shares to get set for the next big leg up.

Yes agreed.

Good to see the SP closing higher than it opened each day.

Momentum building for Feb.

[snigmac]

I'm almost tempted to say that the market has factored in the successful property sale is a result that will occur with certainty. It will be interesting to see the market reaction when news of the property sale is released.

I'm still holding my shares so I'm hopeful there will be a positive announcement soon on the property sale.

[Mel]

You know, at the low point...when the pandemic hit and Sky was knocked harder than everyone else...there was a point where I was down around 90% on a $500K or so investment. Do you have any idea how much ice I needed to to have in my veins to shrug that off?

-90%

To be up $30K now and climbing is a nice change from the depths I have seen!
That's some steely nerves and confidence. My highest buy price was 0.64 and, thankfully, I saw the intrinsic value in SKT and bought more shares between 0.12 and 0.21 and now I am finally not in the red and seeing gains with each passing day is a welcome relief! Bring on $3

[Joshuatree]

[QUOTE=SausageDog;932237 What i have learnt the most is that I now know what I DON'T KNOW!!! and investing can be fun. :t_up:
[/QUOTE]

Thanks for your honesty.Thats essential in investing, some people never admit that to themselves and have blindspots and end up making emotional/wrong decisions and when they've stuffed up with an investment gone sour , ride it down to oblivion or worse top up.

Congrats to all fellow holders ATPIT and thanks to from me to Mr Tea, MarsC ,Ogg , despite his repetitiveness and others.

[winner69]

You know, at the low point...when the pandemic hit and Sky was knocked harder than everyone else...there was a point where I was down around 90% on a $500K or so investment. Do you have any idea how much ice I needed to to have in my veins to shrug that off?

-90%

To be up $30K now and climbing is a nice change from the depths I have seen!

Just as well SKT was only a modest %age of your portfolio ....you really would have beside yourself otherwise

[mistaTea]

Just as well SKT was only a modest %age of your portfolio ....you really would have beside yourself otherwise

Yes, very…modest…

He he he…

[mistaTea]

According to ASB, a couple of people are ready to drop their trousers for $2.61 first thing!

But the next seller wants $2.68. My man...

[Balance]

According to ASB, a couple of people are ready to drop their trousers for $2.61 first thing!

But the next seller wants $2.68. My man...

Same thing happened yesterday - sellers came out at $2.50 and market started below Monday's close.

Then the institutions started buying.

[mistaTea]

Same thing happened yesterday - sellers came out at $2.50 and market started below Monday's close.

Then the institutions started buying.

We need Osmium to come back and lift their ownership stake to 10%.

Maybe they are buying, but slowly so the SP doesn't lift too much.

They bought NZME in waves...no reason to think this should be any different?

This is where Ogg comes in handy...the level of research he is able to do is quite remarkable. He doesn't always draw the right conclusions imo, but he is able to dig very deep on these issues!

[mistaTea]

https://www.nzherald.co.nz/business/freeview-cans-on-demand-service-after-tvnz-powerplay/YAC3JWZVBK54VR2NPK5RWP5AOE/

Another one bites the dust - bye bye Freeview.

They hoped to be the 'aggregator of choice' for the free channels and it didn't work out as the TVNZ On Demand app is really good. Three NOW also getting big improvements with their new owners. So buying a STB to get all free channels in one place clearly wasn't appealing.

I think it is more good news for Sky though...another option removed. Those that just want legally 'free' content are well served with TVNZ On Demand and Three Now if they have fast internet...or Sky Starter if they live out in the whop whops.

But if you also value paid content from HBO, Showtime, History, Sport etc in addition to the free channels...there is only one place for it.

Hopefully Spark Sport throw in the towel at some stage too. It is just annoying for Sports fans now, and I can't see that it is really paying off for them. I can see that their shareholders have had to stump up a lot of cash to build and maintain the platform and secure the content they have bene able to get.

After much fragmentation, I think you see the inevitable move to consolidate again. The bundle lives on.

[mikelee]

Didn't even know about Freeview "on demand".
As long as my dad can still watch "free" contents on Freeview he'll be happy. :)

[mistaTea]

Didn't even know about Freeview "on demand".
As long as my dad can still watch "free" contents on Freeview he'll be happy. :)

Just looking on their website...if you want to have the ability to record Freeview then you need to buy one of their DVR boxes...$450!!

Sky Starter + MySKY = $41/month. So buying the Box would be 11 years worth of Sky Starter + MYSKY...and less channels (Discovery, TLC, Music channels, kids channels etc).

If you don't want to be bothered with recording, and just want Live TV you could get a SmartVu dongle for $119 (https://www.harveynorman.co.nz/tv-and-audio/av-accessories/av-accessories-and-cables/smartvu-4k-ultra-hd-android-tv-dongle.html). But the value in this is diminished with OnDemand disappearing next year, and the channels available for streaming are less than what is available via UHF or satellite.

If you don't want to record with Sky, you can get the standard decoder for 'free' and just pay $25.99/month for Starter. So the cost of the dongle is about 4.5 years of Sky ex MYSKY...but you would have more channels with Sky, and the ability to watch some of the content On Demand if you connect the Sky Box to the internet.

Freeview doesn't seem that compelling to me, compared to other available options.

[mistaTea]

In Spark's Annual Report, this is their write up on Spark Sport:

"Spark Sport

Spark Sport offers a range of local and international sporting options includingrugby, football, cricket, tennis, motorsports,basketball, MMA, racing, boxing, golf,hockey, e-sports, and athletics.

During FY21 we delivered our first‘summer of cricket’ in our seven-yearpartnership with New Zealand Cricket –streaming over 3 million hours of livecricket into New Zealand, with nearly240,000 Spark Sport viewers tuning in towatch the BLACKCAPS and WHITE FERNS.

We gained broadcast rights to the MotoGPfor the next three years and ventured intothe pay-per-view arena, exclusivelystreaming fights from some of theindustry’s biggest names including JosephParker, Dillian Whyte, Alexander Povetkin,and Israel Adesanya.

In June, we acquired the full and exclusiveNew Zealand rights to the UEFA (Union ofEuropean Football Associations)Champions League, UEFA Europa Leagueand UEFA Europa Conference League forthe next three seasons."

Merely stating a few 'factuals' about what rights were acquired over the last 12 months...but certainly not screaming from the rooftops about what a resounding success their venture into Live Sport has been, and that shareholders should brace themselves for more game changing catalysts as they double down on Spark Sport.

Maybe they will stick it out - but Jolie has certainly seemed much less bullish on the idea. I haven't even seen anything from Jeff Latch for a while either.

Have they gotten themselves into a bit of a pickle? That NZ Cricket contract is very long. 7 year commitment!

[n908671]

Just looking on their website...if you want to have the ability to record Freeview then you need to buy one of their DVR boxes...$450!!

Sky Starter + MySKY = $41/month. So buying the Box would be 11 years worth of Sky Starter + MYSKY...and less channels (Discovery, TLC, Music channels, kids channels etc).


Ummm 11 months not 11 years.

[LaserEyeKiwi]

Just looking on their website...if you want to have the ability to record Freeview then you need to buy one of their DVR boxes...$450!!

Sky Starter + MySKY = $41/month. So buying the Box would be 11 years worth of Sky Starter + MYSKY...and less channels (Discovery, TLC, Music channels, kids channels etc).

If you don't want to be bothered with recording, and just want Live TV you could get a SmartVu dongle for $119 (https://www.harveynorman.co.nz/tv-and-audio/av-accessories/av-accessories-and-cables/smartvu-4k-ultra-hd-android-tv-dongle.html). But the value in this is diminished with OnDemand disappearing next year, and the channels available for streaming are less than what is available via UHF or satellite.

If you don't want to record with Sky, you can get the standard decoder for 'free' and just pay $25.99/month for Starter. So the cost of the dongle is about 4.5 years of Sky ex MYSKY...but you would have more channels with Sky, and the ability to watch some of the content On Demand if you connect the Sky Box to the internet.

Freeview doesn't seem that compelling to me, compared to other available options.

Unfortunately you are using years instead of months.

Sky Starter + MySky is $41 per MONTH, So buying the Box would be 11 MONTHS (not years) worth of sky starter + MySky. (Over 11 years someone paying $41 for Sky Starter & MySky a month has paid $4,920).

[mistaTea]

Unfortunately you are using years instead of months.

Sky Starter + MySky is $41 per MONTH, So buying the Box would be 11 MONTHS (not years) worth of sky starter + MySky.

Yes indeed!

I was actually thinking months but wrote years! Ha!

My excuse is I am feeling sick today...just got up from a 30 minute Nana nap which I never do. That's my excuse and I am sticking with it anyway.

Sky for $41 a year...we would have gone bust a long time ago... :D

[cyclist]

My excuse is I am feeling sick today...just got up from a 30 minute Nana nap which I never do. That's my excuse and I am sticking with it anyway.

You weren't having a wee celebration last night per chance? 🤣

[mikelee]

Can't blame him. I've lost count of the numbers of day SP closed higher. :t_up:

[sb9]

SOLD to GMT for $56mln...

[Mel]

The announcement we've been expecting:
Sky confirms sale of Mt Wellington properties for $56m - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/384800)

[LaserEyeKiwi]

Woop woop!

Leaseback cost not to bad either.

[mistaTea]

SOLD to GMT for $56mln...

Be interesting to see how the market goes today.

It 'should' already be priced in.

But by March Sky will have $35M cash in bank + $55M (after sale fees?) sale + 45M or so FCF since June 30 2021 = $135M.

Market cap closed at $460M yesterday, which would mean that Sky's operations are only effectively valued at $325M by the time this deal closes.

That seems outrageously low for a business that is projected to earn $40M-$50M dollars and is about to have all sorts of possibilies opened up to shareholders with the large treasure chest they are about to have...

[Sideshow Bob]

Thats 32 cps if they want to return it to shareholders....

[snigmac]

Now to see whether the market has factored in the sale price already or not. Hopefully it is a positive eventful opening.

[Balance]

Now to see whether the market has factored in the sale price already or not. Hopefully it is a positive eventful opening.

Market has factored in the property sale imo so what are the catalysts from here to drive the sp higher?

1. Capital management initiative (share buyback and/or dividends)

2. Further earnings upgrades

3. Merger and takeover

With the above & being a NZ50 stock, institutions would want to be at market weight as a minimum so there’s many more millions of shares for them to buy to get there.

[snigmac]

I think the uncertainty was on price point (the exact price). 56m falls at the mid/higher price point. Hopefully the market reacts favourably.

I envisage that the realistic catalysts are: growth in streaming, lower turn over of satellite customers, growth of content production and a dividend (and possibly a share buy back).

[LaserEyeKiwi]

I think the uncertainty is on price point (the exact price). 56m falls at the mid/higher price point. Hopefully the market reacts favourably.

I envisage that the realistic catalysts are: growth in streaming, lower turn over of satellite customers, growth of content production and a dividend (and possibly a share buy back).

I agree with this - I was not at all convinced they would get $50m+ from this sale, and so this announcement is a big positive surprise to me.

I think in the short term the catalyst for the stock price now is from the financial engineering aspect.

[sb9]

If Ogg was still around on ST, we would've had 100 GIFs by now and some memes as well :D

[mistaTea]

https://www.nzherald.co.nz/business/sky-tv-sells-mt-wellington-campus-for-bumper-sum/HYBRAGRVCKHMQCMIHUVC5ZD7LM/

Even Chris Keall is positive...

[sb9]

https://www.nzherald.co.nz/business/sky-tv-sells-mt-wellington-campus-for-bumper-sum/HYBRAGRVCKHMQCMIHUVC5ZD7LM/

Even Chris Keall is positive...

Could well be stock of the year on NZX, who would've thought at beginning of the year.

[mistaTea]

Based on cash available to them in March, I predict a buyback (or tax-free capital distribution) in the order of $50M-$75M in March, with a $20M Final dividend in October.

[mistaTea]

Could well be stock of the year on NZX, who would've thought at beginning of the year.

Once Chris Keall starts to say positive things about Sky you know that their strategy execution must be going exceedingly well!

Also, from the article...

"The pay-TV broadcaster also says (https://www.nzherald.co.nz/business/analysts-upgrade-sky-tv-hike-target-price-shares-surge-for-second-day/GDSGPT3ULEG3RK5BIT7J5ZHT5E/) it will enjoy its first profit growth in five years this financial year as streaming gains outweigh the losses in its satellite business for the first time."

Fantastic milestone for the company. Keeping a tight lid on satellite churn while putting the foot down on the accelerator for streaming growth has not reached a tipping point of sorts.

[Balance]

If Ogg was still around on ST, we would've had 100 GIFs by now and some memes as well :D

Be too hard for him to retract the disparaging remarks and posts he made on and about the Chairman?

Ogg totally got caught up with emotion and as the old saying goes, emotion clouds judgement.

[mistaTea]

Be too hard for him to retract the disparaging remarks and posts he made on and about the Chairman?

Ogg totally got caught up with emotion and as the old saying goes, emotion clouds judgement.

I think he just made a typo.

"Pooman" was supposed to be "Lord Jesus Our Saviour"...

[DownTownJr]

So 56mil for the property. About what everyone here was speculating it would sell for. Buy the rumor sell the news? Keen so see how the SP moves today.

Happy holder of SKT and I don't see any reason to sell right now.

[snigmac]

From memory (not sure if this is correct or not), on the books, the property (being sold) was written down to have a value of 10-13 million.

[Meh]

Do they own the property in central Auckland? Could it be worth buying while buildings in town are mildly out of favour?

[Quantitative Easing]

This could end up being the best performing stock this year in the local bourse

[Balance]

This could end up being the best performing stock this year in the local bourse

Definitely on the NZX50 but well beaten by Rakon so far.

[Vitamin_A]

$3.77 per share. Forecast EV/EBITDA of 4.0x + cash on hand. And, the insto's probably know this and will keep creeping.

[Sideshow Bob]

Up 5c to $2.68

[LoungeLizzard]

I think the sale of the property was mostly factored in so I wouldn't expect big movement before Xmas. Next jump will be in the New Year in anticipation of capital return in Feb.

[Balance]

I think the sale of the property was mostly factored in so I wouldn't expect big movement before Xmas. Next jump will be in the New Year in anticipation of capital return in Feb.

Now that Sky is in rude financial health with earnings momentum building up, I am picking that we will see corporate activity (merger or takeover) in the next 6 months.

That's how M&A works with a company like Sky.

[LoungeLizzard]

Now that Sky is in rude financial health with earnings momentum building up, I am picking that we will see corporate activity (merger or takeover) in the next 6 months.

That's how M&A works with a company like Sky.

If you add a gif or two, you could be the new Ogg:p

[mistaTea]

Now that Sky is in rude financial health with earnings momentum building up, I am picking that we will see corporate activity (merger or takeover) in the next 6 months.

That's how M&A works with a company like Sky.

Yes a lot of merit to your thought process.

If they are angling for M&A (which I think is right for Sky long term) then making the moves they are currently making to lift the SP is exactly the right approach. Foxtel have been doing exactly the same thing so that they can maximise their IPO valuation.

If I was an interested party (be it PE, a telco, Foxtel etc) I would want to make a compelling offer to buy Sky before they do any form of capital distribution to shareholders.

[mistaTea]

If you add a gif or two, you could be the new Ogg:p

If Balance is right, a takeover or merger just a few months after Ogg bailed would probably...break him...

[Balance]

If you add a gif or two, you could be the new Ogg:p

Remember, emotion clouds judgement.

[Balance]

Yes a lot of merit to your thought process.

If they are angling for M&A (which I think is right for Sky long term) then making the moves they are currently making to lift the SP is exactly the right approach. Foxtel have been doing exactly the same thing so that they can maximise their IPO valuation.

If I was an interested party (be it PE, a telco, Foxtel etc) I would want to make a compelling offer to buy Sky before they do any form of capital distribution to shareholders.

Turning around any company is a hard task and most company directors & management simply do not have the energy or time & resources to effect turnarounds unless they can get a company really really cheap.

More so especially in a pandemic environment so it is not surprising to me that Sky was not an attractive acquisition or merger candidate while it was struggling to get traction.

And the fact that Sky turned down a $2.30 offer reinforces what I believe that the directors of Sky felt - it was too cheap a price.

Now is when the real interest will begin with momentum on Sky's side.

[LoungeLizzard]

If Balance is right, a takeover or merger just a few months after Ogg bailed would probably...break him...

Poor Ogg - that $100k he made will get swallowed up in therapy...

Agreed- more than ever, SKY is likely to be an M&A target now that it is a profitable company again with a clean balance sheet. And whoever interested is likely to make an offer before the capital return to investors. No downside either way to investors whether an M&A goes ahead or not - Sp will be $3 come February, or a takeover offer will be in the region of $4.

[mistaTea]

Poor Ogg - that $100k he made will get swallowed up in therapy...

Agreed- more than ever, SKY is likely to be an M&A target now that it is a profitable company again with a clean balance sheet. And whoever interested is likely to make an offer before the capital return to investors. No downside either way to investors whether an M&A goes ahead or not - Sp will be $3 come February, or a takeover offer will be in the region of $4.

Yes, takeover would really need to be in the $4 region now - a 50% premium to the current SP which is 'usually' the top end I believe. Though sometimes organisations could go a little higher if they see big value.

$4/share would be a market cap of $700M, but an EV of only $580M by March (if my FCF assumptions are correct, and Sky hold $120M by then).

$580M represents a PE multiple of 14.5 based on low range GAAP earnings. The PE is only 12 if we used top end guidance (48M).

For the right company, nabbing Sky for a PE of 12-14 is not bad going at all - while still enabling existing shareholders to realise a 'fair value'.

[curious zebra]

Based on cash available to them in March, I predict a buyback (or tax-free capital distribution) in the order of $50M-$75M in March, with a $20M Final dividend in October.

In your opinion, what would be the best result for shareholders - a capital return or share buyback?

[mistaTea]

In your opinion, what would be the best result for shareholders - a capital return or share buyback?

It really depends on what the SP is.

If the SP is sub $3 then an on market buyback is probably still the way to go (a no-brainer). Ultimately it depends on what you think Sky is worth. If The Board think Sky is worth $4/share then they should be happy to continue buying back stock even if the SP lifted to $3.50.

But if the SP got to a level where they thought they would be buying back stock at or above intrinsic value, then a tax free capital return could look better.

This is what they are getting advice on.

But while the SP has come up, it is still low relative to the business prospects. So I am picking a sizeable buyback.

[mikelee]

Wow, SKY moving into my neighbourhood in the CBD! Might bump into Sophie during lunch break then. :p

[curious zebra]

It really depends on what the SP is.

If the SP is sub $3 then an on market buyback is probably still the way to go (a no-brainer). Ultimately it depends on what you think Sky is worth. If The Board think Sky is worth $4/share then they should be happy to continue buying back stock even if the SP lifted to $3.50.

But if the SP got to a level where they thought they would be buying back stock at or above intrinsic value, then a tax free capital return could look better.

This is what they are getting advice on.

But while the SP has come up, it is still low relative to the business prospects. So I am picking a sizeable buyback.


I'm assuming Sky, or any other company for that matter, can't force shareholders to take part in a buyback, so technically, if they pitched their buyback price too low, there might be nobody inclined to take part. Are they likely to make it above market price?
And surely, it's not a good look for them to have done that ridiculous capital raise at the equivalent of $1.20 ps, then, less than 2 years later, be offering to buy back those same shares at more than double the price?
I would have thought simply distributing the proceeds from a sale that hadn't happened, and wasn't looking likely to happen back in early 2020, [but has happened now] would be a better 'look' for the Board, don't you think?

[Sideshow Bob]

I'm assuming Sky, or any other company for that matter, can't force shareholders to take part in a buyback, so technically, if they pitched their buyback price too low, there might be nobody inclined to take part. Are they likely to make it above market price?
And surely, it's not a good look for them to have done that ridiculous capital raise at the equivalent of $1.20 ps, then, less than 2 years later, be offering to buy back those same shares at more than double the price?
I would have thought simply distributing the proceeds from a sale that hadn't happened, and wasn't looking likely to happen back in early 2020, [but has happened now] would be a better 'look' for the Board, don't you think?

The company would buy the shares themselves with the company's cash and then cancel them.

Shareholders don't need to do anything. Company would do this if they saw the shares as under-valued, and can be a tax-efficient way of capital return.

[LaserEyeKiwi]

Yes, takeover would really need to be in the $4 region now - a 50% premium to the current SP which is 'usually' the top end I believe. Though sometimes organisations could go a little higher if they see big value.

$4/share would be a market cap of $700M, but an EV of only $580M by March (if my FCF assumptions are correct, and Sky hold $120M by then).

$580M represents a PE multiple of 14.5 based on low range GAAP earnings. The PE is only 12 if we used top end guidance (48M).

For the right company, nabbing Sky for a PE of 12-14 is not bad going at all - while still enabling existing shareholders to realise a 'fair value'.

Personally I would think a EV/forward-earnings multiple of 10x is probably top of the range for SKT (so $480m ex-cash EV). SKT will always have the NZ Rugby rights overhang as a drag on its valuation multiple in my opinion (which will get “heavier” the closer the contract expiry looms), unless they can negotiate a much longer rights deal (10 years+) - which seems unlikely. Still a lot of upside in share price before hitting that EV.

[mistaTea]

Personally I would think a EV/forward-earnings multiple of 10x is probably top of the range for SKT (so $480m ex-cash EV).

That may well end up being close enough to where to SP lands based on whatever they decide to do in Feb.

But if Sky is genuinely now turning to profitable growth again in 2022, then I don't think you can definitively cap the 'top end' to 10x.

[mistaTea]

And surely, it's not a good look for them to have done that ridiculous capital raise at the equivalent of $1.20 ps, then, less than 2 years later, be offering to buy back those same shares at more than double the price?


No doubt they will weigh this up, but they can argue that things are different now. Earnings are much higher now than they were then etc etc.

I don't think shareholders are going to revolt either. If they do a buyback and they helps lift the SP further then the capital gains is all that people are going to care about.

If they just do a tax free a capital distribtion then the amount they can return that way is capped at the net proceeds they have from the asset sale (so somewhere between $50M-$55M). They cannot distribute any of the cash that has come from operations in that tax free manner.

If they do an on market buyback, they could use much more money if they wanted to.

Another option could be a 'tender offer' type arrangement where they offer to buy x amount of shares at the closing SP + some % premium. But that might not generate the interest they would like, and is my least preferred approach.

[Balance]

No doubt they will weigh this up, but they can argue that things are different now. Earnings are much higher now than they were then etc etc.

I don't think shareholders are going to revolt either. If they do a buyback and they helps lift the SP further then the capital gains is all that people are going to care about.

If they just do a tax free a capital distribtion then the amount they can return that way is capped at the net proceeds they have from the asset sale (so somewhere between $50M-$55M). They cannot distribute any of the cash that has come from operations in that tax free manner.

If they do an on market buyback, they could use much more money if they wanted to.

Another option could be a 'tender offer' type arrangement where they offer to buy x amount of shares at the closing SP + some % premium. But that might not generate the interest they would like, and is my least preferred approach.

Just do a AIA type capital return - 1 for 4 shares cancelled for $1.00. Nobody is going to object.

[mistaTea]

Just do a AIA type capital return - 1 for 4 shares cancelled for $1.00. Nobody is going to object.

Yes, this is a good approach.

But, as pointed out earlier, we cap the return to around $50M that way because it can only be from the proceeds of an asset sale to be tax free.

I would be more than happy with this approach for a number of reasons, including that it is quicker to distribute the funds to shareholders versus waiting for an on market buyback to play out (where you also don't really know how many shares Sky will end up being able to buy back as it will depend on how the SP behaves during the buyback).

They have a lot of good options from here.

[mistaTea]

https://www.sky.co.nz/-/sky-viacomcbs-multi-year-partnership-2021

ViacomCBS deal just got extended further and expanded.

[LaserEyeKiwi]

https://www.sky.co.nz/-/sky-viacomcbs-multi-year-partnership-2021

ViacomCBS deal just got extended further and expanded.

Thats interesting - would be good to know how exclusive “exclusive” means. Because Viacom also signed an “exclusive” deal with TVNZ for Paramount+ titles.

Doesn’t seem like they will be launching Paramount+ in NZ anymore if they have promised all their content to TVNZ & Sky on exclusive deals.

[mistaTea]

Thats interesting - would be good to know how exclusive “exclusive” means. Because Viacom also signed an “exclusive” deal with TVNZ for Paramount+ titles.

Doesn’t seem like they will be launching Paramount+ in NZ anymore if they have promised all their content to TVNZ & Sky on exclusive deals.

I thought TVNZ got the 'leftovers' at the time...the stuff Sky didn't really want.

[THEONE]

Hi MistaTea, where are you going after SKT. Do you have any other shares that you Fancy?

Arborgen seems interesting and Halo Foods on the ASX(Keytone Dairy)

[sb9]

Looks like big boys might be busy plugging numbers into abacus to come up magic figure, volumes suggest they're not yet in today in a big way..

[mistaTea]

Hi MistaTea, where are you going after SKT. Do you have any other shares that you Fancy?

Arborgen seems interesting and Halo Foods on the ASX(Keytone Dairy)

I really have no idea.

Been re-reading a lot of Jack Bogle lately too…

[mistaTea]

$2.74!!!!!!!!!!!!!!!!!!!!!!

[Balance]

Looks like big boys might be busy plugging numbers into abacus to come up magic figure, volumes suggest they're not yet in today in a big way..

It has probably run a bit too hard for them - buying volume was at $2.50, then $2.60 but retail investors seem to be setting the pace now?

At $2.70, the stock has rerated up 59% in less than 2 weeks!

[Balance]

deleted deleted

[LaserEyeKiwi]

$2.74 - starting to get interesting…

[winner69]

$2.74!!!!!!!!!!!!!!!!!!!!!!



Double bagger pour moi …..cool eh and pretty good for a punter whose been told he’s not the sharpest pencil in the pencil case

[mistaTea]

Double bagger pour moi …..cool eh and pretty good for a punter whose been told he’s not the sharpest pencil in the pencil case

Fantastic result, well done mate.

Just how awesome this outcome is though also depends on how many shares you purchased!

[Balance]

Double bagger pour moi …..cool eh and pretty good for a punter whose been told he’s not the sharpest pencil in the pencil case

Bravo! Well done!

[RGR367]

Double bagger pour moi …..cool eh and pretty good for a punter whose been told he’s not the sharpest pencil in the pencil case

Did we say that because of your MFB :p

[Bobdn]

I really have no idea.

Been re-reading a lot of Jack Bogle lately too…

Funny, I've gone almost completely Jack Bogle/J L Collins/Mr Money Moustache. SKT is my last individual share and I'm itching to get rid of it to make my transition to a passive investor complete. I'll never make my money back on it unfortunately but every day the pain is a little less. I had written it off completely so this is wonderful Christmas bonus.

I love my passive indexes and ETFs. I no longer have to worry about things like the convention centre catching on fire when I was a SKC and FBU investor. Or another Air NZ strike or covid variant.

Between 2009 and 2017 things were good and I can hand on heart say I mostly did better than the indexes (NZX, S&P500, ASX) through pure luck but I did some silly things in the years after that that undid a lot of my good work. Eventually one's luck runs out.

I miss Jack Bogle. He had a great saying when markets are in turmoil "Don't do something, just stand there". Boy, has that served me well over the last 18 months.

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

[mistaTea]

Funny, I've gone almost completely Jack Bogle/J L Collins/Mr Money Moustache. SKT is my last individual share and I'm itching to get rid of it to make my transition to a passive investor complete. I'll never make my money back on it unfortunately but every day the pain is a little less. I had written it off completely so this is wonderful Christmas bonus.

I love my passive indexes and ETFs. I no longer have to worry about things like the convention centre catching on fire when I was a SKC and FBU investor. Or another Air NZ strike or covid variant.

Between 2009 and 2017 things were good and I can hand on heart say I mostly did better than the indexes (NZX, S&P500, ASX) through pure luck but I did some silly things in the years after that that undid a lot of my good work. Eventually one's luck runs out.

I miss Jack Bogle.

https://www.youtube.com/watch?v=HJigiR4B3g0

I miss him too, a great man and has allowed many millions of people around the world to get a fair share of the pie with low costs.

I gave myself 10 years to assess whether my Charlie Munger-style consolidated investing approach would beat the index. I am 8 years in...I started off doing phenominally well, until I bought a material amount of Sky 4 years ago.

This recent bump has made the picture look a lot better, but as it stands my 8 year CAGR is significantly lagging the NZ50.

Now then, the NZ50 has been growing at an 'unusual' rate with record low interest rates, stimulus packages etc...and Sky TV has been punished excessively (the market risk for Sky turned out to be much bigger than I could have ever imagined, especially when the pandemic hit. The price fell through the floor more than most other companies and we just didn't see the rebound a few months later like we saw elsewhere).

Still, even if I make some adjustments here and there to allow for these anomolies...right now I am still underperforming the index.

There has to come a point (I have given myself a good shot with 10 years) where you have to objectively read the situation and adjust accordingly. If the reality is I am more likely to make more money long term passively investing in ETFs then it would be crazy not to switch.

Jack Bogle understood the human animal though...in his last chapter of The Little Book of Common Sense Investing he talks about how, even though his recommendation is 100% index, he knows people will still want to buy individual plays. So he recommends 95% index and 5% max for individual picks.

My weighting to individual picks will be higher than 5%, but I am open to shifting my portfolio to have the majority of funds tracking two or three indexes.

I will be 40 in a couple of years - I worked out that if I put $1M in an index then, and received an average total return of 8% pa...even if I did not add another cent to it (but just reinvested the divvys) I would have damn near $7M by 65. Purchasing power will have eroded by then, but still...that is a pretty good result considering you don't really have to know anything other than hold the conviction that the businesses in the index will, as a group, produce more and be worth more over time.

[sb9]

Double bagger pour moi …..cool eh and pretty good for a punter whose been told he’s not the sharpest pencil in the pencil case

Well done there, for me with today's price its officially the biggest returner of my portfolio this year :t_up:

[mistaTea]

Well done there, for me with today's price its officially the biggest returner of my portfolio this year :t_up:

At $2.74 I am up 88% this year so far.

[Balance]

At $2.74 I am up 88% this year so far.

Outstanding!

Will be a jolly Christmas for sure then for the family!

[mistaTea]

Outstanding!

Will be a jolly Christmas for sure then for the family!

Thank you mate, and I would love to say that "Buffet would be proud"...but...

It is the previous three years of -29.23%, - 4.22% and -32.36% that has taken the shine off things considerably! :D

[mistaTea]

Yay, I made it to the lofty status of Featured Comment on the NBR today!

https://www.nbr.co.nz/node/232920/#comments

If only I could learn how to spell stabilise :eek2:

[RupertBear]

Double bagger pour moi …..cool eh and pretty good for a punter whose been told he’s not the sharpest pencil in the pencil case

Thats awesome Winner, well done! :) Sharp pencils are over rated, blunt ones work just as well so no worries :D that being said you always come across as pretty sharp to me :cool:

[snigmac]

Yay, I made it to the lofty status of Featured Comment on the NBR today!

https://www.nbr.co.nz/node/232920/#comments

If only I could learn how to spell stabilise :eek2:

Well done. I wouldn't be surprised if Dita and Chris browse these forums before publishing an article on Sky.

[mistaTea]

Thats awesome Winner, well done! :) Sharp pencils are over rated, blunt ones work just as well so no worries :D that being said you always come across as pretty sharp to me :cool:

He isn't called winner69 for nothing...

[Muse]

He isn't called winner69 for nothing...

Whats the 69 part ?

[winner69]

Thats awesome Winner, well done! :) Sharp pencils are over rated, blunt ones work just as well so no worries :D that being said you always come across as pretty sharp to me :cool:

Thanks Rupert

Took the punt when Banksy prints were going like hotcakes ……double bagger here but probably would have done better buying a Banksy …even if it was a limited only print.

Just mentioned that pencil remark to remind who called me that he they misjudged me

No worries

[mistaTea]

Whats the 69 part ?

His favourite thing to do with his lady (or boyfriend?) each time he locks in 'dem gainz'...

[mistaTea]

Just mentioned that pencil remark to remind who called me that he they misjudged me



That sounds like something I might have said...:scared:

But we are practically besties now :D

[RupertBear]

Thanks Rupert

Took the punt when Banksy prints were going like hotcakes ……double bagger here but probably would have done better buying a Banksy …even if it was a limited only print.

Just mentioned that pencil remark to remind who called me that he they misjudged me

No worries

Yes sadly I think we both wish we had been able to buy a Bansky! But now you could use your profits from SKT to buy a Banksy at the next auction! That would be a double banging Winner Winner! :cool:

[Muse]

His favourite thing to do with his lady (or boyfriend?) each time he locks in 'dem gainz'...

Eww, thats gross winner!

[winner69]

Yes sadly I think we both wish we had been able to buy a Bansky! But now you could use your profits from SKT to buy a Banksy at the next auction! That would be a double banging Winner Winner! :cool:

I think Banksy prices go up faster than SKT shares ……hmmm

[winner69]

Eww, thats gross winner!

Moose - I didn't say that .... only MistaTea's dirty thoughts

[mistaTea]

Moose - I didn't say that .... only MistaTea'd dirty thoughts

Guilty as charged!

[mistaTea]

Well we got our answer to whether or not the property sale was already fully priced in…

Answer is NO! There was still $17M to go…

[Friday]

Hey there, First time posting. Holding SKT since June this year. This chat has been a real highlight - with loads of interesting wisdom and speculation from you legends and poor Ogg. I’m working to value investor principles (roughly) and couldn’t believe how much of a bargain SKT was (and still is). Keep up the good analysis and banter! HM

[Chinesekiwi]

His favourite thing to do with his lady (or boyfriend?) each time he locks in 'dem gainz'...


Lol - very witty.

[errornz]

18 months ago I invested in Sky because of OGGs hype and enthusiasm. IÂ’m up nearly $60k. ItÂ’s interesting out of all the people who post here regularly OGG was the one with paper hands.

I must admit that there were times during the last 18 months where I was cursing myself for following OGGs advice and buying. But Im glad I stuck it out.

[nztx]

Well we got our answer to whether or not the property sale was already fully priced in…

Answer is NO! There was still $17M to go…


and poor old OGG missed out on seeing all the action unfold too ;)

hope no-one followed him in liquidating their quotas of SKT :)

[Shareguy]

After a fantastic ride I sold 25 percent of shares yesterday. Always good to take a profit.

[Habits]

and poor old OGG missed out on seeing all the action unfold too ;)

hope no-one followed him in liquidating their quotas of SKT :)

No, in late Sept I had to sell some sky to help a family member and got a great price at the time 2.15. This week FOMO made me buy back half of those sold, 25k at $2.55 believing that sky is still on the way back. Am looking forward to a well deserved dividend, the announcement of a dividend (in feb?) will be big confirmation to an underweight and oversold market IMO. Thanx for all the intelligent insight and humour expressed by posters this year.

[mikelee]

yes, very tempting to go in and buy some more, before the Feb announcement, even at yesterday's closing price. :cool:
As long as dividend is resumed from next year I'll be happy to hold until a takeover. :D

[mistaTea]

As long as dividend is resumed from next year I'll be happy to hold until a takeover. :D

It is a funny quirk of human psychology that as Sky's market valuation increases the likelihood of a takeover probably does increase too.

Now , you could argue that if a takeover happens now (as opposed to before when the valuation was way lower) is because earnings have increased and are more certain etc. The business is now much 'better' than it was even six months ago.

But I don't think that a Business Owner would agree with that notion. Everyone has to make their own assumptions, and it is an art as much of a science...

But when the market cap was way down, $200M to $220M...you could have made a very serious offer of $500M and probably succeeded in taking the business over. It would have been a 'whopping' 150% premium (hence compelling to shareholders at the time) but if you are a telco (for example) and you know damn well that Sky is probably worth at least $1B and probably more to you over time (given synergies, Sky's FCF generation capability, Sky forming a key asset to help you grow your telco base etc...) then $500M would have been an absolute steal.

But if you were hung up on the excessively low quoted value for Sky at the moment then you miss out on a great buy.

An opening offer did come in at around $400M when Sky's market cap was ~$300M. A 30% premium...and The Board rejected it. Given what they have been able to achieve since (pressure for more transparency has helped I think) you would have to say they made a good decision (it was not clear at the time!).

If that PE had more foresight they should have been more than happy to offer a 66% premium ($500M) and not have so many conditions on the sale and the deal would have likely been wrapped up months ago. With all the cash Sky has been able to realise since, they would have effectively gotten Sky's 1M customer relationships, technology, partnerships and content for ~$350M. An absolute steal.

But now, if they are still interested...I think the takeover price has to be more in the $700M+ range. So they would need to pay at least $200M more than 6 months ago, even though nothing has really changed in terms of Sky's future prospects. They always had more fat to cut in terms of costs (and there is still plenty of fat to cut over the next year or so). They have been talking about selling the campus since March...and were always going to realise tens of millions of dollars in the process, selling an asset they they no longer need, key content rights had been locked up for the next 5-6 years already...etc...

I am happy (obviously) that things are playing out the way they are...but it is just astounding how short sighted these organisations are. I have stated before that I know that Orcon have had interest in Sky...they know that Sky would be a key asset to own in order to have any chance of competing with Spark and Vodafone. I would argue that owning Sky is as important to them as a tie up with 2D.

No doubt there was some sniffing around to see if a deal was possible...but I speculate that they would have wanted a merger based on a modest premium to Sky's low SP and a very optimistic valuation for their own business ($700M) based on lofty assumptions effectively giving them the same PE as Spark even though they "aint no Spark"... and so they absolutely blew it.

[bottomfeeder]

Mind you the SP is still fairly low, just over 27 cents in the preconsolidation days. We were all thinking a 35 cent takeover offer would be coming. Only the greedy takeover offers have missed out, now come the realistic ones.

[JohnnyTheHorse]

Good run but looks like we are losing steam and we might be ready for some daily consolidation.

[mistaTea]

https://www.stuff.co.nz/business/industries/127308104/sky-tv-shares-up-38-after-property-deal-reached-nzx50-slips

Grant Williamson from Hindin Green...

Shares in Sky TV jumped 3.8 per cent to $2.73 after reaching a deal to sell its Auckland campus (https://www.stuff.co.nz/business/127298099/sky-tv-reaches-deal-to-sell-mt-wellington-campus-for-56-million) at Mt Wellington to Goodman Property Trust for $56m.
That followed an upgraded profit forecast released last week (https://www.stuff.co.nz/business/industries/127205205/sky-tv-says-programming-savings-dont-mean-viewers-getting-less?rm=a), lifting the shares from about $1.75 to above $2.00.
“It’s getting some good momentum,” said Williamson.
“Most of the earnings upgrade was from cutting costs, so until we get a more solid understanding of increase subscriber figures, the jury's out.”
Sky TV shares recently underwent a consolidation, with shareholders receiving one Sky TV share for every 10. The shares were still at 27c under the old formula, Williamson said.

“So still quite depressed - certainly trending in the right direction.”

[mistaTea]

Isn't it weird that some guy in Gisborne called John Terekia has registered a company called FOXTEL NEW ZEALAND LIMITED (https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/7877919?backurl=H4sIAAAAAAAAAC3KwQrCMBCE4bfJtU%2Bw iBe99CDoCwzZQQvtJmY3Yt%2FeULzNP3xTxZM%2B5bJV2DKWEy 2%2FTltRigdM0TTFXim0WGKQ9JZL%2BQbXBP3AMvUG4yrROtOB 9sfwLud5%2Fvc9EN2vrfR63D%2F%2FNH5FdgAAAA%3D%3D) last year? Registered as a Pay TV company...

He even filed an annual return on 03 December 2021.

I can't see that this guy is actually linked to Foxtel AU though...and am not aware of any Pay TV companies in NZ called Foxtel...

Very odd.

[bottomfeeder]

Isn't it weird that some guy in Gisborne called John Terekia has registered a company called FOXTEL NEW ZEALAND LIMITED (https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/7877919?backurl=H4sIAAAAAAAAAC3KwQrCMBCE4bfJtU%2Bw iBe99CDoCwzZQQvtJmY3Yt%2FeULzNP3xTxZM%2B5bJV2DKWEy 2%2FTltRigdM0TTFXim0WGKQ9JZL%2BQbXBP3AMvUG4yrROtOB 9sfwLud5%2Fvc9EN2vrfR63D%2F%2FNH5FdgAAAA%3D%3D) last year? Registered as a Pay TV company...

He even filed an annual return on 03 December 2021.

I can't see that this guy is actually linked to Foxtel AU though...and am not aware of any Pay TV companies in NZ called Foxtel...

Very odd.
His linkedin profile states he was a Foxtel cable advisor in Sydney. Registering the company name, I think is an opportunist play.

[LaserEyeKiwi]

So what do we think is a realistic Sustainable Dividend for SKT to be paying going forward?

I’ll admit my initial plan was to cash out at or above $3.00, but I might be tempted to stay in long term if the dividend situation is good.

I have said above that I don’t think Sky will be able to sustain an EV/Net Income multiple above 10, but the upside of that belief is that they should be able to offer a very high dividend in that situation.

I would happily stay in the stock if it was paying an 8% dividend yield. Which would be a 24c dividend on a $3.00 share price, at a cost to the company of $42 million.

[mikelee]

Yes, my sentiment was similar. Anything over 20c per share would be great, especially in this lower interest environment. I'd probably never sell and just live off this passive income when I retire. Only a takeover would terminate my ownership of SKY. :cool:

[mistaTea]

So what do we think is a realistic Sustainable Dividend for SKT to be paying going forward?

I’ll admit my initial plan was to cash out at or above $3.00, but I might be tempted to stay in long term if the dividend situation is good.

I have said above that I don’t think Sky will be able to sustain an EV/Net Income multiple above 10, but the upside of that belief is that they should be able to offer a very high dividend in that situation.

I would happily stay in the stock if it was paying an 8% dividend yield. Which would be a 24c dividend on a $3.00 share price, at a cost to the company of $42 million.

Once they have finished with all the majot 'growth' initiatives their CAPEX requirements should be modest. Hirst pointed out that "keep the lights on" CAPEX for Sky is only actually around $10M-$15M...yet total CAPEX is around $40M-$50M (the $25M-$30M difference being spent on 'Enhance' and 'Growth' iniatives).

For Growth, they have already set up Sky Broadband...and have done the bulk of the spending on the new STB (to be released by June 2022, with pilot groups happening from the beginning of next year I believe). So what else is there for them to realistically spend serious money on for growth? Sky Mobile seems like a likely candidate...but beyond that, I am not sure there are many other 'obvious' choices that have good synergies. Setting up Sky Mobile would probably be a $10M-$15M project so easily affordable.

Ultimately, once a business has done the bulk of their 'growth spend' I would think they would have a high payout ratio of 75%-90% of FCF.

FCF will probably settle in the $50M-$60M range.

So if we take the lower end, then we could expect a payout each year of $37.5M to $45M (so your expection seems very reasonable).

If the market agrees that this is sustainable and might even, dare I say it, have scope to grow...then I would think a yield of 5% is realistic (consider the NZME - a business that has faced similar challenges to Sky, is valued based on a yield of 2.8% right now...).

A 5% yield on a $40M dividend is $800M. That might seem very lofty from where we sit now given the market cap is $470M...but then again, if I had of said even a couple of months ago that Sky would go into the Xmas break with a valuation near $500M I would have been laughed out of the forum...

[LaserEyeKiwi]

Once they have finished with all the majot 'growth' initiatives their CAPEX requirements should be modest. Hirst pointed out that "keep the lights on" CAPEX for Sky is only actually around $10M-$15M...yet total CAPEX is around $40M-$50M (the $25M-$30M difference being spent on 'Enhance' and 'Growth' iniatives).

For Growth, they have already set up Sky Broadband...and have done the bulk of the spending on the new STB (to be released by June 2022, with pilot groups happening from the beginning of next year I believe). So what else is there for them to realistically spend serious money on for growth? Sky Mobile seems like a likely candidate...but beyond that, I am not sure there are many other 'obvious' choices that have good synergies. Setting up Sky Mobile would probably be a $10M-$15M project so easily affordable.

Ultimately, once a business has done the bulk of their 'growth spend' I would think they would have a high payout ratio of 75%-90% of FCF.

FCF will probably settle in the $50M-$60M range.

So if we take the lower end, then we could expect a payout each year of $37.5M to $45M (so your expection seems very reasonable).

If the market agrees that this is sustainable and might even, dare I say it, have scope to grow...then I would think a yield of 5% is realistic (consider the NZME - a business that has faced similar challenges to Sky, is valued based on a yield of 2.8% right now...).

A 5% yield on a $40M dividend is $800M. That might seem very lofty from where we sit now given the market cap is $470M...but then again, if I had of said even a couple of months ago that Sky would go into the Xmas break with a valuation near $500M I would have been laughed out of the forum...

Unless I am mistaken (and I may well be) I think most of the ongoing CAPEX cost for SKY in relation to the new STB (and possibly also for SkyBroadband) is the actual hardware that gets sent to every user. So Capex for the new STB will remain very high until the majority of the userbase has transitioned to it.

A STB that is rented too subscribers is classified as an asset rather than an expensed item, so it stays on the balance sheet and the cost of it is included in Capex (and will be a depreciation expense over a long timeframe). So hypothetically if the new STB costs sky $200, then distributing 50,000 of them will incur $10 million in CAPEX spend upfront. So transitioning 500,000 users to them will cost $100 million in capex.

[mistaTea]

Unless I am mistaken (and I may well be) I think most of the ongoing CAPEX cost for SKY in relation to the new STB (and possibly also for SkyBroadband) is the actual hardware that gets sent to every user. So Capex for the new STB will remain very high until the majority of the userbase has transitioned to it.

A STB that is rented too subscribers is classified as an asset rather than an expensed item, so it stays on the balance sheet and the cost of it is included in Capex (and will be a depreciation expense over a long timeframe). So hypothetically if the new STB costs sky $200, then distributing 50,000 of them will incur $10 million in CAPEX spend upfront. So transitioning 500,000 users to them will cost $100 million in capex.

I think the new STB is based on something similar to this:https://www.pbtech.co.nz/product/DVAMIX18554/Xiaomi-TV-Box-MI-Box-S-Media-Player-4K-Ultra-HD-St.

In which case I would expect the box to cost no more than $100 a pop for Sky...hopefully less. The CAPEX they have incurred for the customisations/software changes is a separate thing.

In which case the initial upfront cost to Sky for the boxes will be $10M for every 100K boxes...how much that cost ends up being in a given year will depend on how the uptake is. Based on Sky's projections for the uptake, I think the ongoing CAPEX will be reasonable if not modest. So if they budgeted, say, $20M for the new STB in FY22...customising/configuring and testing the new box should cost $5M? Open source software...it is Google so highly configurable etc...I would have thought $5M would be a tonne of money to do customer research, UI design work, select a vendor, change the software, do proof of concept surveys with your customers, roll out etc etc. Depending on unit cost, that would leave enough kitty to have 150K-200K boxes ready to rock and roll (or enough for a solid 35% of the base to switch over to).

And then those costs are recouped over time because we will either maintain some form of STB rental fee or update our Bundle prices to factor it in. FCF may well take a hit if the box is very popular (a good problem to have!) but longer term the cash rolls in and the CAPEX tapers off and drops so we can enjoy dividends that grow.

I am not sure about Broadband...I would have thought the cost of the modem is taken care of within whatever wholesale fee Orcon has with Sky.

[LaserEyeKiwi]

I think the new STB is based on something similar to this:https://www.pbtech.co.nz/product/DVAMIX18554/Xiaomi-TV-Box-MI-Box-S-Media-Player-4K-Ultra-HD-St.

In which case I would expect the box to cost no more than $100 a pop for Sky...hopefully less. The CAPEX they have incurred for the customisations/software changes is a separate thing.

In which case the initial upfront cost to Sky for the boxes will be $10M for every 100K boxes...how much that cost ends up being in a given year will depend on how the uptake is. Based on Sky's projections for the uptake, I think the ongoing CAPEX will be reasonable if not modest. So if they budgeted, say, $20M for the new STB in FY22...customising/configuring and testing the new box should cost $5M? Open source software...it is Google so highly configurable etc...I would have thought $5M would be a tonne of money to do customer research, UI design work, select a vendor, change the software, do proof of concept surveys with your customers, roll out etc etc. Depending on unit cost, that would leave enough kitty to have 150K-200K boxes ready to rock and roll (or enough for a solid 35% of the base to switch over to).

And then those costs are recouped over time because we will either maintain some form of STB rental fee or update our Bundle prices to factor it in. FCF may well take a hit if the box is very popular (a good problem to have!) but longer term the cash rolls in and the CAPEX tapers off and drops so we can enjoy dividends that grow.

I am not sure about Broadband...I would have thought the cost of the modem is taken care of within whatever wholesale fee Orcon has with Sky.

I think it will be quite a bit more expensive than the unit you linked too for two reasons: It will have to also have all the satellite signal input and conversion hardware, and also will need a very large amount of storage for recordings (the unit you linked to only has 8GB storage, which is practically nothing and is only enough for the OS and some apps (and hopefully some buffering), whereas something at least approaching what the current MySky box offers will need 128GB+ at a minimum one would think. Hopefully it is less than $200, but not sure.

Anyway it is perhaps prudent to maybe not expect both a big capital return AND a big dividend guidance in Feb, but instead one or the other (unless they are prepared to carry some debt again). Although I suppose they could do a one off upfront capital return, and then guide for the dividend to be paid in 12 months time - leaving them with plenty of cushion for capex spending.

[mistaTea]

I think it will be quite a bit more expensive than the unit you linked too for two reasons: It will have to also have all the satellite signal input and conversion hardware, and also will need a very large amount of storage for recordings (the unit you linked to only has 8GB storage, which is practically nothing and is only enough for the OS and some apps (and hopefully some buffering), whereas something at least approaching what the current


Sure, but it ultimately depends on the type of contract they have signed and what the pricing model is.

If customing a STB to accept a satellite feed, update the UI so it is more condusive to the ideal "Sky experience" that should all come under the 'system changes' budget that is a one-off.

For the storage...we would need 1TB...so perhaps the unit cost of the "bigger box" is more expensive...but Sky will have a wholesale rate as part of their contract for that...maybe I am underestimating the cost a bit...but I would be shocked if our wholesale rate was anywhere near $200 a pop.

[cyclist]

Not a lot of margin in those sorts of devices (when thinking of retail versus wholesale rates). Considering that many (all?) full PVR type devices are $350+ retail, I think $200 each is a very realistic minimum cost. The hard drive alone is worth about $80.

[mistaTea]

Not a lot of margin in those sorts of devices (when thinking of retail versus wholesale rates). Considering that many (all?) full PVR type devices are $350+ retail, I think $200 each is a very realistic minimum cost. The hard drive alone is worth about $80.

Well Vodafone TV retailed for $179 and $119 when on special.

Ok, it didn’t have a hard drive…but those are retail rates.

Maybe I am underestimating the cost here a tad…but I just felt when I see some of these new boxes and what they retail for etc that the cost has come way down.

I have no idea why those PVR boxes have such a high retail price. I assume it’s because they sell so few of them that they need a much bigger margin to justify stocking the product.

Still, I would be very surprised if sky was paying anywhere near the order of $200 a box.

[Jay]

Was it $199 or $299 they were saying as a guide one-off price in those surveys about it cannot remember, thought it was the latter

[mistaTea]

Was it $199 or $299 they were saying as a guide one-off price in those surveys about it cannot remember, thought it was the latter

I think it was $199 one-off option but guaranteed infinite replacements if your one broke. Or a $15/month MySky type fee if you didn’t want to stump up the two hundy.

Further evidence to me that the box costs Sky much less than $200. If they are giving a one-off option like that which guarantees ‘free’ replacements then that is baked into the $199 retail price.

[mistaTea]

https://www.nbr.co.nz/analysis/2021-review-annual-shoeshine-awards

"Finally, the Last Chance Saloon award is won by Sky TV, which has stabilised its losses (https://www.nbr.co.nz/node/232797)and continues a valiant performance in the acquisition of broadcast sports rights. Will shareholders finally buy it? Will another company finally buy it?"

Even NBR wondering what the end game is here for Sky. I was going to call it Sky's...Final Solution, but that is probbaly not the best term to use!

[mistaTea]

https://www.mediaweek.com.au/mediaweek-100-australian-medias-most-powerful-people-40-21/

Andrew Penn

Chief Executive Officer and Managing Director, Telstra
Andy Penn took the top job at Australia’s largest telecommunications company on 1 May 2015. At Telstra, Penn is leading an ambitious change program transforming Telstra to be positioned to compete in the changing technology world of the future with 5G at its core. He has a career spanning 40 years across three different industries – telecommunications, financial services and shipping. Penn first joined Telstra in 2012 as Chief Financial Officer. In 2014 he took on the additional responsibilities as Group Executive International. Prior to Telstra, Penn spent 21 years with the insurance and investment group AXA. His time at AXA included the roles of Chief Executive Australia & New Zealand, Group Chief Financial Officer, Head of Transformation Program, Chief Executive International. With a 35% stake in Foxtel, Penn recently supported an IPO, but indicated Telstra was likely to remain a long-term investor in the TV business.

Well, Telstra should be supportive of achieving an ASX/NZX listing by merging with Sky. Le't say Foxtel is 5 times the size of Sky...and Sky is valued at NZ$700M for the purpose of a merger. That would value Foxtel at NZ$3.5B. Telstra's share of that is NZ$1.225B (35% x $3.5B). Which would mean that would hang on to a significant 29% of the new merged business ($1.225B/$4.2B). Newscorp could do the same, or sell some (or all) of their equity to some instos keen to get in.

The new ANZAC business is much stronger than each company on its own, has bigger leverage and punching power when negotiating content rights and renewals and would be a much more popular pick for investors.

[mikelee]

Anyone looking to top up if SP drops below $2.60? :cool:

[bottomfeeder]

Anyone looking to top up if SP drops below $2.60? :cool:
I sold some at 2.70, will buy them back at 2.55. Just like getting a dividend.

[mistaTea]

Anyone looking to top up if SP drops below $2.60? :cool:

I am always looking to top up on Sky :t_up:

I only know how to BUY, never SELL.

[golden city]

Sold 2.72 nice Christmas gift

[mikelee]

Yes, I'd keep buying too, until at least the Feb announcement, then probably hold it until a potential take-over.
But good to see that people are able to cash in before the holidays....WIN WIN! :laugh:

[LaserEyeKiwi]

I sold some at 2.70, will buy them back at 2.55. Just like getting a dividend.

that would seem to trigger some significant taxation cost though wouldn’t it, that would more than cancel out the 15c lower price.

[bottomfeeder]

Been a trader for many years.Unfortunately tax due is a part of the system.One third tax 2/3 for me.

[mistaTea]

Been a trader for many years.Unfortunately tax due is a part of the system.One third tax 2/3 for me.

Sure, but to LEK's point...wouldn't selling at $2.70 and buying back at $2.55 make the transaction somewhat pointless given the tax implications?

[LaserEyeKiwi]

Ok so there might be some weakness to come with Omicron variant if what’s happening in the USA is repeated here in our rugby teams, meaning a disruption to the upcoming Super Rugby season. While early indications are that Omicron might be less deadly, it is now disrupting professional sports as it is so highly transmissible that many teams now have infected players and as such the leagues (NFL & NBA) are cancelling games all over the place this week.

[mistaTea]

Ok so there might be some weakness to come with Omicron variant if what’s happening in the USA is repeated here in our rugby teams, meaning a disruption to the upcoming Super Rugby season. While early indications are that Omicron might be less deadly, it is now disrupting professional sports as it is so highly transmissible that many teams now have infected players and as such the leagues (NFL & NBA) are cancelling games all over the place this week.

She’ll be right mate.

[bottomfeeder]

Sure, but to LEK's point...wouldn't selling at $2.70 and buying back at $2.55 make the transaction somewhat pointless given the tax implications?

Well If you think 2/3 of $750 less $60 brokerage in a week or so is not worthwhile, you may be right, sometimes the small trades add up over a year to look pretty good in my book. Have to trade individually around the ten thousand dollars to make the best of the minimum brokerage. Still holding 30k shares, holding $25k profit. Second time in as made $7500 in the last move from 16 cents to 22cents and a couple of thousand from 15 cent to 19 cent before that. Its all profit no matter how much you make. Just made $190 after brokerage on CVT today. Its not always about big money.

[mistaTea]

Well If you think 2/3 of $750 less $60 brokerage in a week or so is not worthwhile, you may be right, sometimes the small trades add up over a year to look pretty good in my book. Have to trade individually around the ten thousand dollars to make the best of the minimum brokerage. Still holding 30k shares, holding $25k profit. Second time in as made $7500 in the last move from 16 cents to 22cents and a couple of thousand from 15 cent to 19 cent before that. Its all profit no matter how much you make. Just made $190 after brokerage on CVT today. Its not always about big money.

Well, the brokers will love you anyway!

Fees matter!

[bottomfeeder]

Well, the brokers will love you anyway!

Fees matter!

Don't want to labour the point, but if it goes back to $2.55, I will be holding the same shares, but with $650 more in my pocket. If it doesn't get back down to $2.55, I made my profit by selling at $2.70. As a trader you have to understand the SP of any stock goes up and down.

[LaserEyeKiwi]

Don't want to labour the point, but if it goes back to $2.55, I will be holding the same shares, but with $650 more in my pocket. If it doesn't get back down to $2.55, I made my profit by selling at $2.70. As a trader you have to understand the SP of any stock goes up and down.

What price did you buy the shares for that you sold at $2.70?

[mistaTea]

What price did you buy the shares for that you sold at $2.70?

I bet $2.69…..

[bottomfeeder]

I bet $2.69…..
You dont pay attention to detail do you. My last buy was 1.76 on the 19 November. If you would have read my post at todays value I am holding a profit of $25k. Dont make that profit by buying at $2.69 and selling at $2.70. But why the nastiness and facetiousness. Must be a lot on ST sitting on a good profit with this stock.

You seem a bit stressed MT, have you been holding since $3.00 preconsolidation and adding and adding. To be fair, I can thank you a bit for this one, you have been upramping for years here and on hot copper. It made me think just what is in this company.

Prior to accepting the fact that I am a trader and forking over the tax, I made decisions based on not wanting to look like a trader. Many times that strategy turned to custard.

[mistaTea]

You dont pay attention to detail do you. My last buy was 1.76 on the 19 November. If you would have read my post at todays value I am holding a profit of $25k. Dont make that profit by buying at $2.69 and selling at $2.70. But why the nastiness and facetiousness. Must be a lot on ST sitting on a good profit with this stock.

You seem a bit stressed MT, have you been holding since $3.00 preconsolidation and adding and adding. To be fair, I can thank you a bit for this one, you have been upramping for years here and on hot copper. It made me think just what is in this company.

Prior to accepting the fact that I am a trader and forking over the tax, I made decisions based on not wanting to look like a trader. Many times that strategy turned to custard.

I was just teasing mate!

[LaserEyeKiwi]

You dont pay attention to detail do you. My last buy was 1.76 on the 19 November. If you would have read my post at todays value I am holding a profit of $25k. Dont make that profit by buying at $2.69 and selling at $2.70. But why the nastiness and facetiousness. Must be a lot on ST sitting on a good profit with this stock.

You seem a bit stressed MT, have you been holding since $3.00 preconsolidation and adding and adding. To be fair, I can thank you a bit for this one, you have been upramping for years here and on hot copper. It made me think just what is in this company.

Prior to accepting the fact that I am a trader and forking over the tax, I made decisions based on not wanting to look like a trader. Many times that strategy turned to custard.

OK so here is what I dont get - if your cost base is $1.76, and you sold for $2.70, then your taxable gain is 94c, and at 33% you will pay 31c tax on that sale. So if you rebuy at $2.55c, then you are 16c per share worse off than if you had simply held the shares that you sold at $2.70. You would need a drop of more than 31c to below $2.39c to see an entry price that makes sense. Perhaps I’m missing something?

[mfd]

OK so here is what I dont get - if your cost base is $1.76, and you sold for $2.70, then your taxable gain is 94c, and at 33% you will pay 31c tax on that sale. So if you rebuy at $2.55c, then you are 16c per share worse off than if you had simply held the shares that you sold at $2.70. You would need a drop of more than 31c to below $2.39c to see an entry price that makes sense. Perhaps I’m missing something?

If he pays tax on all sales, that tax would be liable anyway on final sale. This might bring forward a tax liability but I don't think it creates it.

It's a different game for those of us who believe we are long term holders and try not to pay tax on the final sale.

[mikelee]

I've sold shares for just a few hundred dollars gain too. It's actually a good living if you can do it on a regular basis, but I'm not that good so still got my day job. :D

[mistaTea]

I've sold shares for just a few hundred dollars gain too. It's actually a good living if you can do it on a regular basis, but I'm not that good so still got my day job. :D

I wonder if you guys have ever done a retrospective analysis on your trades to see whether you have actually ended up better off in the long term buying and selling in dribs and drabs (high activity) versus if you just bought some shares and then sat on your arse doing nothing.

[JohnnyTheHorse]

Some insights as to how I manage things (as what would probably be considered a professional trader). I run 3 accounts: long term hold, swing trading and day trading. My long term holding account is essentially for excess capital that cannot be traded (due to liquidity). Long term I look for undervalued stocks that have strong trends (essentially could be seen as long term swing trades). Day trading and swing trading are my edge and I will regularly be trading stocks I hold in the long term account to mop up profit from shorter term volatility. I very regularly day trade or swing short positions on my long term holdings to take advantage of expected drops after strong runs (or simply hedge), as this helps my patience with the long term holding (my biggest weakness!). Ultimately things are structured to extract as much money as possible from the markets in a tax efficient manner with total portfolio risk strictly controlled.

I personally wouldn't recommend day trading to nearly anyone. Without a huge passion for it and a unique mental skillset it will tear you apart eventually.

[mistaTea]

I personally wouldn't recommend day trading to nearly anyone. Without a huge passion for it and a unique mental skillset it will tear you apart eventually.

As soon as I read that your approach requires any type of mental skillset I was like "I'm out!".

The only possibility of doing 'ok' in the long run for guys like me (who have a relatively low IQ) is to hope you can find three or four 'no brainers' over an investing lifetime, bet big and then do nothing.

[mistaTea]

You know, News Corp owned 44% of SNT until 2013 (https://web.archive.org/web/20180224114043/http://www.newshub.co.nz/business/murdoch-to-sell-stake-in-sky-tv-2013030409)...

Well if Foxtel are worth EV $3.5B and Sky is worth EV $700M then they would end up owning 54% of the new entity (effectively 10% more of Sky than they did after Sky TV merged with Independent Newspapers in 2005).

If they still want to keep a big share (like Telstra intends to) then they could sell 20% for $840M as part of a placement offer. Get some cash, increase liquidity by letting go of some shares while still owning about a quarter of the merged business.

This is such a 'no brainer' of a deal I would be absolutely shocked if Sophie Moloney and Patrick Delany can't put a good deal together they they can recommend to the Sky Board and News Corp/Telstra.

The actual percentages will depend on the final agreed values for business value...Foxtel still has around $1B debt, so that will be a drag on any valuation they get (whether they IPO or seek a merger). But then they also have stronger growth prospects than Sky given the larger Australian population etc...so it is far from straight forward.

But the principle remains! As a Sky shareholder I am very keen to explore possibilities here.

[JohnnyTheHorse]

As soon as I read that your approach requires any type of mental skillset I was like "I'm out!".

The only possibility of doing 'ok' in the long run for guys like me (who have a relatively low IQ) is to hope you can find three or four 'no brainers' over an investing lifetime, bet big and then do nothing.

Haha honestly I believe it's more to do with personality traits and managing your mental state than outright intelligence.

[mistaTea]

Taking into account debt, Morgan Stanley value Foxtel at between AU$2B - $2.9B (https://www.afr.com/street-talk/why-foxtel-is-worth-upwards-of-2-billion-20211115-p598yd) (so EV of $3B - $3.9B).

That representents four to six times EBITDA.

SNT is projected to have EBITDA of $150M-$160M. We have to adjust this by, say, $35M to take into account the lease costs.

So we end up with adjusted EBITDA of $115M-$125M. Let's then take a mid point of $120M.

A valuation in the order of 4x-6x would value Sky at $480M - $720M ($2.74 - $4.11 per share). Given the zero debt and cash balance after selling the campus...I would think Sky could get closer to the $720M (We are currently not trading far off the lower end range anyway).

The AFR provides quite interesting comparisons to other similar businesses, including Sky (which had a very low market cap at the time of writing).

“Secondly, we think SKT NZ is actually the closest comparable, in terms of managing a legacy satellite payTV subscriber business, with no broadband assets. But to Foxtel’s advantage it does have a more advanced streaming TV business versus SKT NZ, thus in our view Foxtel warrants a premium multiple to SKT NZ on 2.5 times enterprise value to EBITDA.”

[bottomfeeder]

OK so here is what I dont get - if your cost base is $1.76, and you sold for $2.70, then your taxable gain is 94c, and at 33% you will pay 31c tax on that sale. So if you rebuy at $2.55c, then you are 16c per share worse off than if you had simply held the shares that you sold at $2.70. You would need a drop of more than 31c to below $2.39c to see an entry price that makes sense. Perhaps I’m missing something?

Excluding brokerage and tax. Tax cuts your profit by 1/3. Buy at $1.76, price goes up to 2.70. On Paper for 5000 shares you have made $4,700.

Price goes down to $2.55 all you have made if you hold on paper is $3,950. If you sold at 2.70 you would have set your profit in at $4,700. If it goes back down $2.55 and you buy you are back in as if you held, but of course you are better off by $750. Still holding a virtual paper profit of $3,950 in as much the shares you are holding have cost as if you held onto the shares. Now there is a certain premise here that I feel that the SP will get to $3.00. If I thought 2.70 was the highest it would ever reach I would have sold my total holding. When the SP heads north again I will realise that gain again perhaps. Maybe someone above is right, its not intelligence that makes trading work. Maybe its a bit gambling, but sometimes it takes a bit to get over a nerve especially when you buy in and you have to catch a falling knife, you get to the stage that you think I have to stop this. Hey, I havent made money all the time. I have had one brutal disaster, at least the losses are tax deductible against other income.

Its all trading no holding you have to change your mindset that all you are holding is on trading account not as a long term hold, so you eventually sell your rebuy in. Now a month or so before the end of the financial year you have to review your position just in case circumstances warrant a sale near the end of the year. You value shares on hand at the end of the period at the lower of cost or market value. Sometimes tax is deferred till the next year sometimes you pay a little in advance. Eventually taxation will look after itself. You find a lot of institutions rebalance their portfolios just prior to the end of financial years, ie 31b December, 31 March and 30 June, to make their returns look the way they want. Then within a week they rebuy or resell their holdings. Thats why I never trust quoted returns from fund managers as they are relatively easily manipulated, depending on their valuation basis at the end of the financial year.

Ive seen investors hold onto shares watching them go up and down, sometimes they go up consistently if you are lucky and on the ball, sometimes they fail. Metlifecare is a case in point, people on here were buying and selling and quoting its like a christmas present that just keeps on giving.

[airedale]

As soon as I read that your approach requires any type of mental skillset I was like "I'm out!".

The only possibility of doing 'ok' in the long run for guys like me (who have a relatively low IQ) is to hope you can find three or four 'no brainers' over an investing lifetime, bet big and then do nothing.
MT, you are too modest.:cool:

[mistaTea]

https://www.pressreader.com/new-zealand/taranaki-daily-news/20080228/281702610412808

Would ya look at that? It seems Foxtel and SNT have gone to first base before...

[LaserEyeKiwi]

<delete delete>

[Balance]

https://www.pressreader.com/new-zealand/taranaki-daily-news/20080228/281702610412808

Would ya look at that? It seems Foxtel and SNT have gone to first base before...

News Corp proceeded to sell its 44% stake in Sky for $815m in 2013.

Now it can potentially buy back the whole company for half of what it sold out in 2013!

[LaserEyeKiwi]

Professional sports being cancelled all over the place due to Omicron infecting players - be prepared for possibility of another long period of disruption for Sky Sport content.

I’m out of Sky for now (need funds for potential house deposit) - good luck to all who are staying in, and congrats on staying strong over the last year.

[mistaTea]

News Corp proceeded to sell its 44% stake in Sky for $815m in 2013.

Now it can potentially buy back the whole company for half of what it sold out in 2013!

Yeah that is very true.

As always for sky though…the prospect of a merger anytime soon always seems very slim.

And I am certainly not predicting that a deal will be done…merely pointing out that I would be pursuing it if I was the CEO of SNT or Foxtel. Provided it is possible to agree on fair relative values (and neither party is in La La land about what their own business is ‘worth’) then I would think the mechanics of how a deal could work is pretty straightforward.

If Sky are not going to go down the telco route then I would like them to do something else that will help to get more scale.

Using the available cash for buybacks and dividends is fantastic…IF, AND ONLY IF, the funds cannot reasonably be used for growth.

A business like Sky has many options at this junction in terms of growth. It would be a damn shame to return the capital to shareholders at this junction instead of using it to help fund some kind of M&A activity.

One way or another, we will know what is happening in a couple of months.

The team pulled it out of the bag for Xmas…so some faith has been restored.

Let’s see where to from here.

[mistaTea]

Professional sports being cancelled all over the place due to Omicron infecting players - be prepared for possibility of another long period of disruption for Sky Sport content.

I’m out of Sky for now (need funds for potential house deposit) - good luck to all who are staying in, and congrats on staying strong over the last year.

So THAT’S why it dipped to $2.57!

Ya rotter!

[mikelee]

Good to see lower number of cases reported each day this week though. :)
I'm expecting Omicron to play out much quicker than Delta and international borders to open by middle of 2022 the latest. :cool:

[mistaTea]

Good to see lower number of cases reported each day this week though. :)
I'm expecting Omicron to play out much quicker than Delta and international borders to open by middle of 2022 the latest. :cool:

Know way to ‘know for certain’ but I doubt any Omicron shutdowns are going to be anything like what we have seen in the past.

The world is now adapting to a phase of living with the virus.

Omicron is contagious as hell which is not great, but seems to be a lot milder in terms of symptoms.

Probably an off market discussion…but I have long thought that the virus is learning and evolving so that it doesn’t kill so many. It is not in the interest of the virus to kill the host.

Will there be some disruption for Sky in terms of live sport? Probably.

But when you take into account clawbacks for those scenarios relative to lost subscribers, Sky seem to come out ok most of the time.

[LaserEyeKiwi]

So THAT’S why it dipped to $2.57!

Ya rotter!

I may be back at some point - especially if I don’t end up getting an offer accepted on a house any time soon.

[mikelee]

Anytime b4 the Feb announcement should be good, potentially :cool:
Definitely looking to top up myself after the price settled down a bit in Jan 22.

[JohnnyTheHorse]

Got my final swing trade entry today for the daily bullflag setup / daily higher low. Given the small amount of retracement from the high, if we break back through $1.60 we have a high likelihood of testing recent highs and a better than even likelihood (imo) of creating new highs. Good risk/reward setup.

Long term holding not touched and have no intention of touching any time soon.

[Balance]

Got my final swing trade entry today for the daily bullflag setup / daily higher low. Given the small amount of retracement from the high, if we break back through $1.60 we have a high likelihood of testing recent highs and a better than even likelihood (imo) of creating new highs. Good risk/reward setup.

Long term holding not touched and have no intention of touching any time soon.

One could wake up sometime in the new year and one may see a merger or takeover announcement - I pick at least $3.50 as a realistic price.

[mistaTea]

Looks like Santa still has plenty in his sac for us leading up to Xmas…

[Balance]

Looks like Santa still has plenty in his sac for us leading up to Xmas…

Heading back to a new high above $2.75 for end of the year?

[Vitamin_A]

What's really encouraging is the low volumes. The insto's need to get at least index weighting in SKT and to date with these small volumes it's probably not them. I'm still thinking fair value is probably a dollar away based on earnings and the company's net cash position.

[uravgtrader]

What's that after market trade at 262.62

[winner69]

You guys mention Orcon etc …is this important:

On the eve of the New Year, 2degrees and Orcon have announced plans to merge, to form New Zealand's third-largest Telco.Big moves!

[snigmac]

It's not really important. I didn't think that it was a realistic option for Sky to be taken over by Orcon or Two Degrees. Currently the company is strong enough and has enough (for the next 12 months, if guidance can be met) to grow it's share price organically.

[winner69]

No test cricket on SKY today …that’s a bugger

NZ Cricket doesn’t realise how much goodwill / interest they’ve lost taking the money from Spark …I’d say.one term net negative impact

[Old mate]

Yeah I agree winner. NZ cricket have ballsed that up.

[Joshuatree]

Yes , I do miss wandering in out of the heatwave outside to the cool lounge and lounging about and watching just one more over :cool: inthis idyllic ,soporific,well-fed,tranquil holiday mood.

[Joshuatree]

Yes , I do miss wandering in out of the heatwave outside to the cool lounge and lounging about and watching just one more over :cool: inthis idyllic ,soporific,well-fed,tranquil holiday mood. In

[RTM]

Yeah I agree winner. NZ cricket have ballsed that up.

Completely agree.
Listening to commentary on
https://onlineradiobox.com/nz/radiolive/?cs=nz.radiolive&played=1

But certainly miss watching the big moments

[winner69]

Completely agree.
Listening to commentary on
https://onlineradiobox.com/nz/radiolive/?cs=nz.radiolive&played=1

But certainly miss watching the big moments

Could watch through Spark but can't switch to watch the races on a regular basis ....and watching cricket on a phone is not cricket

[mistaTea]

It's not really important. I didn't think that it was a realistic option for Sky to be taken over by Orcon or Two Degrees. Currently the company is strong enough and has enough (for the next 12 months, if guidance can be met) to grow it's share price organically.

I wonder if there is another NZ business that might bolt on to Orcon-2D with obvious synergies.

Can anyone on this forum think of one?

Hell, if it was already listed it would be even better as Orcon and 2D could readily fulfill their ambitions to list on the public markets…

There has to be a business like that somewhere… it’s out there I’m sure but I just can’t quite put my finger on it…

[Bobdn]

I wonder if there is another NZ business that might bolt on to Orcon-2D with obvious synergies.

Can anyone on this forum think of one?

Hell, if it was already listed it would be even better as Orcon and 2D could readily fulfill their ambitions to list on the public markets…

There has to be a business like that somewhere… it’s out there I’m sure but I just can’t quite put my finger on it…

Is it Sky? The reason i say that is that I recall Vodafone was about to purchase Sky some years ago but the Commerce Commission decided to block it although I'm hazy on the details. It was the right call in retrospect because otherwise there would have been a "monopoly" on sports broadcasting in NZ. It reminded me of when the FTC blocked the merger of the Blockbuster and some other rental video company in the US. It's the sort of intervention that keeps us safe as consumers otherwise the Blockbusters of the world would have had a "monopoly". Fortunately I have the choice of two video stores in my town - not just one. The competition keeps everyone honest.
https://www.nytimes.com/2005/03/26/business/media/blockbuster-ends-bid-for-rival.html

Regulators have their fingers on the pulse of market trends - so grateful to have them.

[Habits]

Is it Sky?

An obvious choice, but what is obvious to one person is obscure to another. In the meantime we have to keep waiting for the sale announcement and february reports.

[mistaTea]

Is it Sky? The reason i say that is that I recall Vodafone was about to purchase Sky some years ago but the Commerce Commission decided to block it although I'm hazy on the details. It was the right call in retrospect because otherwise there would have been a "monopoly" on sports broadcasting in NZ. It reminded me of when the FTC blocked the merger of the Blockbuster and some other rental video company in the US. It's the sort of intervention that keeps us safe as consumers otherwise the Blockbusters of the world would have had a "monopoly". Fortunately I have the choice of two video stores in my town - not just one. The competition keeps everyone honest.
https://www.nytimes.com/2005/03/26/business/media/blockbuster-ends-bid-for-rival.html

Regulators have their fingers on the pulse of market trends - so grateful to have them.

This has got to be the best p1ss take I have read in a long time!

Ha!

[snigmac]

I wonder if there is another NZ business that might bolt on to Orcon-2D with obvious synergies.

Can anyone on this forum think of one?

Hell, if it was already listed it would be even better as Orcon and 2D could readily fulfill their ambitions to list on the public markets…

There has to be a business like that somewhere… it’s out there I’m sure but I just can’t quite put my finger on it…

I don't think this is realistic currently with the lack of express announcement.

Good to see you posting again mistaTea and co. Happy 2022.

[mistaTea]

I don't think this is realistic currently with the lack of express announcement.



The Orcon-2D merger would need to complete first before any other M&A activity could take place.

So if picking up Sky is on the cards, the second half of this year is the earliest anything could happen with Sky-Orcon-2D.

Lucky my favourite holding time is forever.

I would love a merger that allowed me to hang on to my shares. I keep thinking, if someone else bought us out in the meantime and I received cash for shares it would suck because then I would have to hunt around finding another wonderful business to buy.

That is hard work! I prefer my approach to investing which is laziness bordering on sloth.

[uravgtrader]

Looks like most people are finally seeing the pitfalls of Spark Sport. https://www.facebook.com/34497296301/posts/10158782664641302/

[freebee]

Yes alot of people not happy with Spark coverage of the cricket with many comments there saying something like 'you suck, we had to pay extra to watch the cricket and you've stuffed it up for us, please just give it back to Sky' i had problems with chromecast not connecting as did many others it seems. See what today brings hopefully Rossco and Ravindra can save us 🙏

[bottomfeeder]

Traders love that 15 cent up and down volatility. B 2.55 S 2.70. Let's hope it continues every week till February.

[mikelee]

yeah, just as surprised but not too worries either and looking forward to Feb's announcement :)

[mistaTea]

back from my sidelining…. so share price has dropped 8% for no particular reason lol.

looking forward to feb capital management plan, happy accumulating impatient retail speculators.

Welcome back mate, the place just hasn't been the same without you.

Not uncommon for Sky to drop more than the overall market. I wouldn't waste any brainpower trying to understand it.

Feb 24 the key date...unless some kind of catalyst event happens before then.

[Airw0lf]

Just as an FYI to all those interested in SKT. Switched to Sky Broadband over the holiday period and it mostly went without a hitch - service came on at the agreed time, it was easy to configure my existing router, and it was great to get landline service direct from the Chorus ONT instead of the router as was previously the case with Vodafone. Sky have also already upgraded everyone on their previous 100 Mbit plan to 300 Mbit service for free, unlike Vodafone which stated that it was planning to get round to it in 2022. The only hitch was that I still haven't received my Sky router (which I requested as a spare) - I get the distinct feeling that if you say you already have a router then they deprioritise you for a new Sky router. $69/month for 300 Mbit unlimited broadband is a good deal if you are already a Sky customer. The speeds are very solid and caused me no issues.

[mistaTea]

The only hitch was that I still haven't received my Sky router (which I requested as a spare) - I get the distinct feeling that if you say you already have a router then they deprioritise you for a new Sky router.

Bizarre - I would have thought that sending of routers was handled by a largely automated process at the Orcon end. You should follow up though...not sure what your existing router is, but the Sky/Orcon routers use wifi6 tech and the speeds/quality are noticeably different if you are coming off a wifi5 router.



$69/month for 300 Mbit unlimited broadband is a good deal if you are already a Sky customer. The speeds are very solid and caused me no issues.


Yes it is a good deal. Essentially getting 300Mbs fibre + Sky Starter for $95/month. Not bad considering this is based on a wholesale deal. If our Board got their act together and organised a M&A deal with the owners of Orcon (and soon to be 2D) those bundle prices could come down further. They could probably offer that same deal for $85/month and still make money. Big growth opportunities for the business and wonderful for the consumer.

I opted for the 900/400Mbs plan...an extra 33c/day for ultra fast seemed like a no brainer to me. Though at the time the $69/month plan was for 100Mbs and I agree that 300Mbs downloads is plenty fast for streaming.

[mistaTea]

https://www.sky.co.nz/-/sky-new-zealand-secure-multi-year-deal-with-discovery-sports

Lots of noise about how much content Sky loses out on...but as of late it seems that Sky is securing a lot more in the way of content deals.

Not bad for a doomed business eh?

[snigmac]

Does anyone know if Sky get exclusive access to the Game of Thones prequel or is this included in the HBO deal that was signed already?

[mistaTea]

Does anyone know if Sky get exclusive access to the Game of Thones prequel or is this included in the HBO deal that was signed already?

On this one, you mean?

https://www.ign.com/articles/game-of-thrones-cancelled-prequel-even-after-spending-30-million-dollars-on-pilot

[snigmac]

On this one, you mean?

https://www.ign.com/articles/game-of-thrones-cancelled-prequel-even-after-spending-30-million-dollars-on-pilot

I believe the prequel is called House of the Dragon... It looks really good.

[mistaTea]

I believe the prequel is called House of the Dragon... It looks really good.

If it’s HBO/HBO MAX sky will have it.

[snigmac]

If it’s HBO/HBO MAX sky will have it.

This could be quite positive for Sky if they have exclusive access in NZ. From memory, people signed up to Neon previously just for Game of Thrones.

[Airw0lf]

Bizarre - I would have thought that sending of routers was handled by a largely automated process at the Orcon end. You should follow up though...not sure what your existing router is, but the Sky/Orcon routers use wifi6 tech and the speeds/quality are noticeably different if you are coming off a wifi5 router.Yes it is a good deal. Essentially getting 300Mbs fibre + Sky Starter for $95/month. Not bad considering this is based on a wholesale deal. If our Board got their act together and organised a M&A deal with the owners of Orcon (and soon to be 2D) those bundle prices could come down further. They could probably offer that same deal for $85/month and still make money. Big growth opportunities for the business and wonderful for the consumer.I opted for the 900/400Mbs plan...an extra 33c/day for ultra fast seemed like a no brainer to me. Though at the time the $69/month plan was for 100Mbs and I agree that 300Mbs downloads is plenty fast for streaming.Yup the router situation was quite bizarre, I definitely got the impression that my volunteering to use my router affected things. However I have a very new ASUS Wifi 6 router so I doubt the Sky one would be much/any better. Definitely a good deal overall though.

[bottomfeeder]

SP on the way up again, seems like a classic dump and pump scheme. Should reac $2.70 early next week unless they read this post and decide to cool it.

[mikelee]

yeah, great for day traders...I'm done topping up so will just sit back and watch the show going forward :cool:

[mikelee]

Has anyone got access to the full article below in today's Herald?
HBO Max tries to close gap with Netflix and Disney in streaming wars (https://www.nzherald.co.nz/business/hbo-max-tries-to-close-gap-with-netflix-and-disney-in-streaming-wars/QQ6TCY2JOOO7Z5ONXTGZOC5KLQ/)

[mistaTea]

Has anyone got access to the full article below in today's Herald?
HBO Max tries to close gap with Netflix and Disney in streaming wars (https://www.nzherald.co.nz/business/hbo-max-tries-to-close-gap-with-netflix-and-disney-in-streaming-wars/QQ6TCY2JOOO7Z5ONXTGZOC5KLQ/)



They are up to about 74M HBO MAX subs now...but many of those subs are freebies given to their cable subs. So it is a bit murky.

But they are doing well.

Still a distant third to NETFLIX and Disney+ though.

They would also ultimately like to launch their HBO MAX service in the UK too...but can't due to their contract with Sky. A relationship that is very valuable to them.

[LaserEyeKiwi]

They are up to about 74M HBO MAX subs now...but many of those subs are freebies given to their cable subs. So it is a bit murky.

But they are doing well.

Still a distant third to NETFLIX and Disney+ though.

They would also ultimately like to launch their HBO MAX service in the UK too...but can't due to their contract with Sky. A relationship that is very valuable to them.

It an improper comparison in my opinion - HBO effectively has hundreds of millions of viewers internationally through other content aggregators (like Sky in NZ) that aren’t included in their subscriber stats.

[mistaTea]

It an improper comparison in my opinion - HBO effectively has hundreds of millions of viewers internationally through other content aggregators (like Sky in NZ) that aren’t included in their subscriber stats.

Yes that is a very good point.

Also, when you consider the a bunch of the 74M HBO MAX subs are freebies to cable channel subs...it would be interesting to know how many of the 74M are people that value the service enough to pay for it.

From a pure streaming perspective, I think that number would be a better comparison against NETFLIX and Disney+.

To me, it further highlights the importance of distribution partners to Warner. NETFLIX and Disney+ are by far and away the dominant global streaming services. NETFLIX because...well, they are just awesome. Disney+ because it is awesome too...but also has a very unique value proposition which virtually guarantees them a lot of subs.

Very hard for other companies like Warner to get the kind of streaming numbers required to justify ditching their partnerships. There are only so many streaming services the average punter is prepared to juggle. Which is why, so far, we have not seen them do that. They may want to include their HBO MAX in future deals, but I don't see them killing the Golden Goose anytime soon.

And in the meantime, the Bundle lives on.

On another note...just 6 weeks until we find out what goodies Bowman has in store for us. Unless someone comes in before then with a deal.

Some possible candidates (in order of likelihood imo):



Private Equity
Spark
Discovery
Warner (though they usually do deals with their own PE vehicle...)
Foxtel
MIRA-Aware (owners of Orcon and soon-to-be 2D. If it wasn't for the fact they are busy sorting out the 2D merger right now they would have featured higher on the list)


Vodafone not included in the mix. I think them shutting down VTV is a clear signal that their owners see little value in content.

[mistaTea]

https://www.express.co.uk/life-style/science-technology/1547121/sky-glass-5-things-that-sky-needs-to-fix-in-2022-4k-tv

Pretty minor critques.

Sign me up!

[mistaTea]

No test cricket on SKY today …that’s a bugger

NZ Cricket doesn’t realise how much goodwill / interest they’ve lost taking the money from Spark …I’d say.one term net negative impact


https://www.rnz.co.nz/news/sport/459189/battling-to-watch-the-black-caps-on-spark

[mistaTea]

WHo in their right mind is currently selling?!

It beggars belief really.

[mistaTea]

Were punters expecting a takeover bid over new years?? weak hands!

I stopped trying to guess at the motivations of others a long time ago.

All I know is that the current SP movements are just noise.

Feb 24 is all that matters in the short time (or some other M&A catalyst before then, should something like that happen).

[snigmac]

Were punters expecting a takeover bid over new years?? weak hands!

I imagine that people will be taking profits. Also they could be worried that there are issues with the property sale. Could be anything.

[airedale]

It beggars belief really.


One of those Wall St gurus said "sometimes the market does something so stupid that it takes one's breath away"".

[mikelee]

But surely institutions would be topping up so there's gotta be more demand than shares available to buy!? :confused:
This reminds me of people selling just before the property sale is announced.
Let's hope for a repeat! :)

[snigmac]

But surely institutions would be topping up so there's gotta be more demand than shares available to buy!? :confused:
This reminds me of people selling just before the property sale is announced.
Let's hope for a repeat! :)

It will present a good buying opportunity for non sellers. I remember toping up at $1.69 a few months back :D

[mistaTea]

But surely institutions would be topping up so there's gotta be more demand than shares available to buy!? :confused:
This reminds me of people selling just before the property sale is announced.
Let's hope for a repeat! :)

The volatility we see is largely caused by the lack of trading volume.

This often happens when the market still views a company with great uncertainty.

Even modest changes in trading volumes can cause big swings in pricing (up or down) as we see with Sky.

If the market was more ‘certain’ about sky we would see much higher volumes and therefore a consensus price that did not fluctuate significantly.

So it’s the same old story for sky.

And if Sky is to remain a listed company, then the only way the market will view the business with more certainty/clarity is if they become a fully fledged telco like they did in the UK years ago.