Been reading this thread for some time and have added SKT to my portfolio this week. Their business model has issues, however all this could change v quickly with either a takeover or strategic alliance. Little downside risk and considerable upside potential IMHO. Thanks all for your contributions.
Me too leftie
A bit like as they say over on MET thread HEADS YOU WIN, TAILS YOU DON’T LOSE (or even win a bit)
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Not sure why some people that have written off SKY completely. Assuming, fibre connections make up around half of internet connections in NZ. Traditional satellite sky distribution model still has a long way to yet. (2018, fibre connections stood at 598,000. stats.govt.nz) Sky just needs to focus on getting their App onto as many devices as possible. Their android app doesn't necessarily work on most devices. I personally believe they should release their own device, similar to the Amazon fire stick. This is an amazing device that sells for $20 USD when on sale. Fully programmed when sent to a customer. All the customer does is plug it into a HDMI port. They just need to keep it simple.
"multiple parties considered as strong contenders and in live talks"
I wonder how much they want for it.
Merging it with Sky would make a good business.
This could be achieved if Sky purchased it. I wonder if their banking syndicate would lend $$ for an acquisition like this. Or is that just pie in the sky given they just had to tap shareholders to pay their bonds back?
Alternatively a big International player could purchase both companies and merge them.
Looks like Oaktree rebuffed a $400M offer from Sky back in 2015.
$400M would look very tasty right now given how things have deteriorated in the industry since 2015.
Revenues down to ~130M now. EBITDA is likely $30M maybe? They would be lucky to get 3 times that in this climate given their revenue comes from advertising which has been suffering for a while?
So maybe $90M max if they are lucky? Less most likely?
I suppose if Mr Market recently said Sky was only worth $85M (absurd!) then that wouldn’t bode well for what a company like Mediaworks could expect to sell for?
Great thing about SKT is the forecast for earnings is transparent . Might burn down in a fire but there’s a glimmer of hope .
Earnings are transparent although I think next years guidence is a little too light. Think they will do better than that. But at these prices what are we complaining about.
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Originally Posted by Left field
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