Wow. Thought this wouldn't happen for another 6 months.
RIP to anyone not participating in the entitlement.
Looks like I'll be writing a cheque for $51k.
My new average is 15c.
In for a penny, in for a pound.
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Wow. Thought this wouldn't happen for another 6 months.
RIP to anyone not participating in the entitlement.
Looks like I'll be writing a cheque for $51k.
My new average is 15c.
In for a penny, in for a pound.
a 1: 2.83 @ 12c per share would be exactly the same if they did a 1:1 @ 34c per share (which happens to be 1c/share greater than the last trade before the Halt).
So it is a very clever way of offering a 'heavily discounted' rights issue.
That said, existing shareholders who still believe Sky have a profitable future would be crazy not to take the offer (if then can afford to). Their equity would be savagely reduced by non-participation to the point that they would probably never break even again.
For shareholders who have second thoughts about Sky's viability as a going concern (despite the injection of up to $157M cash) then throwing more good money after bad would be illogical.
Ultimately diversifying into Broadband and Mobile in addition to maintaining key partnerships (Vodafone TV plus potentially new partnerships with energy companies etc) will be a good thing. Yes, Broadband is a crowded market - but Sky have a large customer base to market too. If they get their pricing right it has every chance of being successful.
Moving to offer Sky Go as a standalone will also be a good move. Some satellite customers will hand back the STB, but so be it. Sky GO has improved dramatically and would be a cheaper way of offering a streaming option to the many customers who still enjoy the more traditional bundles. The recent move to allow casting was a reasonably strong signal that this was where they were going with the product.
Standalone Sky GO and Vodafone TV customers should ultimately have access to better bundles. There should be no need, for example, to force a customer to purchase Starter as an entry package. Because there are no costs with satellite and STB installation, there should be much more flexibility in Bundles. If a customer just wants to subscribe to Sport for example, offer a standalone price. $39.99/month Standalone but only $29.99/month if you are adding it to an entertainment bundle etc.
A lot of possibilities. Lower average revenue per customer for sure, but many more customers.
Reason why it is a 2.83 : 1 rights issue is because the underwriters are only prepared to back the deal on such a basis. It’s pointing a gun to the head of existing shareholders.
I don't think so.
It's to flush out all the cash strapped "ma and pa" retail holders. "Goldman and Co" will pick up their cheap shares at 12, and will likely accumulate more after. Then when the dividends are about start again and the turn around is complete, they'll sell it off to a hedge fund and make a huge profit. Probably already have a buyer lined up. Standard stuff really.
Agreed, they have essentially forced existing retail shareholders to participate by going 1 : 2.83.
You can apply for up to 20% more than your allotment too. So wealthy shareholders who take up their allotment and then some will probably end up doing very well out of this, whereas the shareholders with limited means that are unable to participate will do terribly.
I think its disgraceful and disrespectful to existing shareholders. Not everyone can write a cheque for the required amount. Institutions are basically giving the middle finger to this issue, the size of the placement redefines the meaning of the word pathetic.
The systemic problem I see is that management think live sport is the panacea for all their woes. Oh wait...now its broadband. They literally seem to have no idea that many people subscribe to watch anything else but sport on Sky. Disc: Sky subscriber without sport. (watching vastly overpaid, spoiled and idolized athletes chasing silly balls around is a hugely overrated form of entertainment in my opinion. Who cares who wins, what does it really matter....).
Have I understood this correctly .... if I had a 100 shares, I can apply for 283 additional shares? and if successful I'll end up with 383 shares?
The thing that I take from this fund raising, leaving aside any consideration of earlier buys, is that this is fully underwritten at 12 cents. So somebody {instos, fund managers, professionals etc.} is willing to take a punt at that price. So if the price gets to .174 cents again you will be back in profit. 12 cents to 18 cents, will it make 50%.? after the fund raising. I think so, you pays your money and takes a chance.
Well done to the contrarian buyers of the bonds over the past couple of months.
They look to have a better chance of being made whole now via the wipe-out of the equity.
GLTA.