SKT Sky Network Television Limited.

[mistaTea]

A lower share price means more shares cancelled in November and EPS accretion and a higher dividend yield correct?

That would be the case if they were doing an on market share buyback. A lower SP would mean they bought back more shares, and those shareholders who hung onto their shares would have a bigger piece of the pie in the future (and therefore higher dividend yield etc).

But they are not doing that. They will just decide the total # of shares to cancel and pay each shareholder $X.xx per cancelled share. Everyone still owns the same size piece of the pie and their future dividend yield is unchanged.

You may want to rethink your ST handle if this is the kind of thing you are asking chief! I'm just saying...

[bottomfeeder]

That would be the case if they were doing an on market share buyback. A lower SP would mean they bought back more shares, and those shareholders who hung onto their shares would have a bigger piece of the pie in the future (and therefore higher dividend yield etc).

But they are not doing that. They will just decide the total # of shares to cancel and pay each shareholder $X.xx per cancelled share. Everyone still owns the same size piece of the pie and their future dividend yield is unchanged.

You may want to rethink your ST handle if this is the kind of thing you are asking chief! I'm just saying...

I think they are valid questions. They will cancel shares, and pay each shareholder. Each shareholder will own the same percentage of the total company, but with fewer shares. Profit, dividend yield should go up per share, but NTA should remain the same. Dependant on the required div per share can be maintained or increased per share, the SP eventually go up, unless thus increased value is already factored into the current SP.

[mistaTea]

I think they are valid questions. They will cancel shares, and pay each shareholder. Each shareholder will own the same percentage of the total company, but with fewer shares. Profit, dividend yield should go up per share, but NTA should remain the same. Dependant on the required div per share can be maintained or increased per share, the SP eventually go up, unless thus increased value is already factored into the current SP.

Yes EPS will go up, but you will own less shares so your yield remains unchanged.

All that matters is the market capitalisation of Sky (regardless of how that manifests itself on a per share basis, which will change depending on how many shares they cancel).

Current market cap = $386M. Subtract the $70M payout and the value of Sky TV's operations is currently $316M.

Based on their guidance I would anticipate the market cap to fall much further. We all know by now that I am terrible at predicting SP movements, however I think logic is on my side here.

A $20M divvy (midpoint) is a 6.3% yield based on a $316M market cap. That would mean the market expects a lower yield from Sky than it does Spark! (6.72%).

If Sky TV had a compelling growth story then that could make sense. But Sky TV does not have a believable growth story. Broadband is not a growth area for them and the new STB will (at best) further slow down the STB attrition rate. In the meantime their ability to renew key contracts on favourable terms is pretty much gone now. So because it is hard to see growth from where they are now, you would expect the market to expect a higher yield than a 'sure thing' company like Spark (and that means the market cap has a way to go still in terms of dropping).

They blew their opportunity to become a telco (I told them directly to buy Vocus and now $700M looks like a steal. Especially since they were prepared to spend almost half that buying a billboard and radio station). That ship has well and truly sailed now, so there is no realistic growth opportunity for them in telco now.

The next sensible idea is probably a tie up with NZME. I have outlined all of the reasons why. This will help them become a bigger entity and go after that advertising revenue SM is banging on about. However I wouldn't expect the market to immediately fall in love with the new merged entity. It is probably the right move for both parties to join forces now, however the market will still need some convinving around the 'growth story' for these two legacy players.

[Moneyman]

That’s how I understand and interpret it. Dividend going forward is the same but on a lower overall investment so yield per share owned is higher (price paid less 47 cents).

[mistaTea]

That’s how I understand and interpret it. Dividend going forward is the same but on a lower overall investment so yield per share owned is higher (price paid less 47 cents).

Yes…but you will also own less shares…

[xafalcon]

New Sky box to cost $200

What a short sighted decision this is. Whoever dreamed it up needs to retire (is this the ghost of Fellet?)

[mistaTea]

New Sky box to cost $200

What a short sighted decision this is. Whoever dreamed it up needs to retire (is this the ghost of Fellet?)

When Fellet was in charge, the plan for the Infinite Video STB rollout was:

• Offer the new box to customers with a one-off fee
• Stop charging MYSKY rental fee to customers who elected to keep their current box

A very good plan I thought - however, all these years later - judging by Sophie's email I got this morning it seems that you either fork out $200 for a STB that is an unknown in terms of performance and reliability or keep paying your MYSKY rental fee.

Not great for customers I don't think.

[mistaTea]

https://www.nzherald.co.nz/business/...Z2MMLP5D4XIIU/

So you have to pay Sky $200 for the new box...and then a $15/month rental fee like MYSKY if you want to be able to record shows!

HAHAHAHAHAAHAHAHA! These guys have actually lost the plot. Who in their right mind would go for that?

Long standing STB customers will probably be offered the box for free. But those long standing subs (5 years+ I assume) are less likely to want it.

Jesus Christ.

[Sideshow Bob]

https://www.nzherald.co.nz/business/...Z2MMLP5D4XIIU/

So you have to pay Sky $200 for the new box...and then a $15/month rental fee like MYSKY if you want to be able to record shows!

HAHAHAHAHAAHAHAHA! These guys have actually lost the plot. Who in their right mind would go for that?

Long standing STB customers will probably be offered the box for free. But those long standing subs (5 years+ I assume) are less likely to want it.

Jesus Christ.

Yep, example #2,983 that Sky have lost the plot.

[Entrep]

Yep, $200... no thanks. Will keep my Smart TV which does all that and my existing STB.