SKT Sky Network Television Limited.

[Baa_Baa]

Is that you OGG?

Seems like it, MistaTea the long time advocate has left the room. Ogg sell the lot and make a short term profit has inherited the shell. We're all ****ed. Unless they're wrong, which one of them has been all along, but the other has not, yet.

[jimdog31]

Seems like it, MistaTea the long time advocate has left the room. Ogg sell the lot and make a short term profit has inherited the shell. We're all ****ed. Unless they're wrong, which one of them has been all along, but the other has not, yet.

or an alternate view, maybe the fact that Mista has come to this point should be an indicator that this ship really has run its course. It will never reach where it should be valued until someone is acquiring it.

Mista has been SkT number one fan since 2017, thats some staying power given the rollercoaster the shareprice has ridden in that time. I think hes earned the right to call time.

If there are longer standing shareholders than that on here, who have held longer please let us know your thoughts. I suspect theyve all bailed a long time ago.

[snigmac]

Make up your mind MT. One minute you want Sky to buy something, next minute you don't.

I think there a synergies that can be unlocked by a Sky, NZR and Sl (CommercialCo) tie up. Sky would have a moat for Rugby rights in NZ. There would be multi party mutual benefit via the creation and sharing of local Rugby. I can see this fitting and cementing long term growth plans for Sky and making it a more valuable and attractive target for acquisition in the future.

[mistaTea]

Seems like it, MistaTea the long time advocate has left the room. Ogg sell the lot and make a short term profit has inherited the shell. We're all ****ed. Unless they're wrong, which one of them has been all along, but the other has not, yet.

I don't really see the parallels. Ogg didn't care about the underlying business or the mertis of Sky...he just wanted a quick gain so would have been happy for Sky to be sold during the bottom when the pandemic hit.

I am pointing out that it is very clear to me, after a lot of experience with Sky that she will never be valued at what she should theoretically be valued at (based on a DCF analysis) in her current form. We have witnessed this for a while now where despite her very good progress the market remains very pessimistic. Sky's operations are currently only valued at ~$300m despite the huge progress.

Yes the SP will rise somewhat no doubt if they do buybacks and a dividend...but not as much as people may hope.

What I want for Sky is a more material transformation away from being solely a content aggregator. I am very much open to Sky merging with someone like a telco or NZME, and remaining a listed company.

But given the low quoted value, it is also likely (perhaps more likely) that someone else may want to buy Sky. And if a reasonable offer came in I would not object to it based on some notion that 'she'll be right' once the divvys start etc.

I have watched this company for many years now, and have a large portion of my net worth invested. I would argue that I have learnt more about this business than most as the amount of skin in the game I have motivates me to study the business deeper. It is not on a 'whim' that I have drawn the conclusion that Sky TV (in her current form) should not remain a listed business OR she needs to transform into something bigger to get a better valuation.

[mistaTea]

Only 54 shares traded so far today.

Stallion this is no time for your mind to be wandering on other things!

Gaze into your Palantir and tell me what this Omen portends...

[jimdog31]

I don't really see the parallels. Ogg didn't care about the underlying business or the mertis of Sky...he just wanted a quick gain so would have been happy for Sky to be sold during the bottom when the pandemic hit.

I am pointing out that it is very clear to me, after a lot of experience with Sky that she will never be valued at what she should theoretically be valued at (based on a DCF analysis) in her current form. We have witnessed this for a while now where despite her very good progress the market remains very pessimistic. Sky's operations are currently only valued at ~$300m despite the huge progress.

Yes the SP will rise somewhat no doubt if they do buybacks and a dividend...but not as much as people may hope.

What I want for Sky is a more material transformation away from being solely a content aggregator. I am very much open to Sky merging with someone like a telco or NZME, and remaining a listed company.

But given the low quoted value, it is also likely (perhaps more likely) that someone else may want to buy Sky. And if a reasonable offer came in I would not object to it based on some notion that 'she'll be right' once the divvys start etc.

I have watched this company for many years now, and have a large portion of my net worth invested. I would argue that I have learnt more about this business than most as the amount of skin in the game I have motivates me to study the business deeper. It is not on a 'whim' that I have drawn the conclusion that Sky TV (in her current form) should not remain a listed business OR she needs to transform into something bigger to get a better valuation.

Hear, hear.

My journey has only been since Jun 2020, and I've seen enough in that time to wholeheartedly agree with the above.

[Monarch]

Why do you care if the market doesn't appropriately value Sky? If it keeps making good money and doesn't blow it all on stupid growth initiatives then it will end up in your pocket one way or another no? I only worry about the "keeps making good money" part.

[mistaTea]

Why do you care if the market doesn't appropriately value Sky? If it keeps making good money and doesn't blow it all on stupid growth initiatives then it will end up in your pocket one way or another no? I only worry about the "keeps making good money" part.

No that is not enough.

The business needs to have a market cap more representative of its FCF profile.

Having a low SP means Sky’s shares make for poor currency, which in turn makes meaningful future transactions for growth (acquisitions) less likely.

The company can’t grow meaningfully and so the SP drops further, making it even harder for her to get out of the ditch.

Low quoted value is not a big issue if it is a short term thing. But when the quoted value drops and stays low for long periods of time (years in our case) it is a problem.

[jimdog31]

Why do you care if the market doesn't appropriately value Sky? If it keeps making good money and doesn't blow it all on stupid growth initiatives then it will end up in your pocket one way or another no? I only worry about the "keeps making good money" part.

Well, therein lies the problem, Sky has continuously kicked the "in your pocket" scenario down the road. And also squandered stupid money on things like Rugbypass.

So, the shareprice is a reflection of the markets lack of belief that the leadership & board actually can return money "in your pocket"

So yes i care the market not appropriately valuing sky, because that tells me the board & leadership aren't right.

[mistaTea]

Well, therein lies the problem, Sky has continuously kicked the "in your pocket" scenario down the road. And also squandered stupid money on things like Rugbypass.

So, the shareprice is a reflection of the markets lack of belief that the leadership & board actually can return money "in your pocket"

So yes i care the market not appropriately valuing sky, because that tells me the board & leadership aren't right.

Yes that is a good point too. Sky could have started paying a dividend last year (even if a modest one initially) but The Board keep stalling even though a dividend would help support the SP to some extent. Bowman has said he will pay out 50-80% of adjusted FCF at the FY results, so you have to assume it will be 50% given the desire to hoard cash (from what we can observe in terms of their behaviour).

The sustained low SP has significantly reduced our options. A merger with a business like NZM, for example, should be straightforward. But because of our low SP it is far from straightforward and may well end up being the single biggest factor that prevents such a transformational deal. Now, if you don't like the idea of a NZM merger you may be happy with that...but the same issue applies for anything else.

It would have been impossible to merge with Vocus NZ when they were up for sale. You had a situation where Vocus Group wanted $600M-$700M for the NZ assets and Sky had a market cap at the time hovering around $250M even though Sky produces far more cashflow than Vocus NZ and has a much wider reach in terms of customer numbers. Vocus NZ was essentially just a broadband play.

And so a deal with Vocus NZ would have been impossible because we just couldn't afford it based on our poor SP currency.

If Foxtel picked up the phone today and wanted Sky to do a reverse takeover-merger type transaction our low SP would be a massive hurdle.

So Sky should have many MANY options to exploit in terms of M&A possibilities that Sky could pursue...but it just becomes too damn difficult. Existing shareholders would get wiped out (diluted) as things stand.

This entire issue goes away if Private Equity or someone else make a strong offer to buy Sky outright. They can take her private which will remove a lot of the 'noise' you get from the public markets so that the new owners can continue the existing projects and also implement their own cost saving + growth inititiatives. That then allows them to pursue their own M&A opportunities in the future. If the PE outfit is affiliated with a big content producer (like Atairos's links to Comcast) then all the better in terms of options in the future.

So we have to wait and see what happens after the mysterious announcement. But I am clear in my own mind that:

1. Sky using the cash to buy something is probably just going to end up destroying shareholder wealth (I would be happy to be proven wrong of course)
2. Merger would be great, but I would be surprised if that was possible given the poor currency we have interms of SP
3. Takeover would seem like the most plausible option for Sky going forward. If Jarden do their job and get multiple interested parties to the table there is no reason shareholders cannot be fairly compensated.