GNE - Genesis Energy

[couta1]

One point that doesn't seem to be sufficiently highlighted in the investment statement is what happens to the balance between customers and generation should Tiwai point reduce its consumption even further? Genesis has a take or pay gas contract with Kupe, the gas field they partly own. The need to buy gas when cheaper sources of generation were available has blighted the company in recent years, as it will in FY2014 and FY2015. Genesis make much of the fact that should they choose to, they can ramp up production at Huntly and service all their own customers for which they currently buy energy on the wholesale market.

But if Huntly has to close, and of all the power stations in NZ it is the most likely candidate for closure IMO that would throw the generation customer balance at Genesis completely out of whack. The Genesis customer base for electricity could then collapse overnight as rival energy customers control their own generation to force up wholesale prices to bring Genesis to its knees. I am thinking back here to what happened to Transalta in NZ when they ended up as a pure retailer against the Gentailers and got destroyed. I don't think things would get that bad at Genesis, but the company could be forced to suddenly have in size, which would do shareholders no good at all...

SNOOPY

A whole lot of speculation here Snoopy

[Snow Leopard]

...But if Huntly has to close, and of all the power stations in NZ it is the most likely candidate for closure IMO...

SNOOPY

Why?

Best Wishes
Paper Tiger

[tosspot]

Quick question. Do you need to wait for 3 working days after selling your shares to pay for the IPO or can you sell the shares then apply straight away.

[bull....]

Im getting a little worried now about this heavy scaling from asb and lack of it from direct broking from comments ive read here why? we havnt seen this much scaling for the other ipo's so my biggest concern is have the institutuions been loaded up at the expense of the little fella if so where is the buying going to come from on listing if the institutions got the bulk of shares in the bookbuild.

[Joshuatree]

Maybe not for you bull if you're concerned; what are your motives here, a great D/Y or a stag and/or FOMO?

[Xerof]

Im getting a little worried now about this heavy scaling from asb and lack of it from direct broking from comments ive read here why? we havnt seen this much scaling for the other ipo's so my biggest concern is have the institutuions been loaded up at the expense of the little fella if so where is the buying going to come from on listing if the institutions got the bulk of shares in the bookbuild.

bull.... if they put in a low bid price, they would be heavily cut back - it could be as simple as that.

I don't see ASB as being a big player in the scheme of things - they are retail online primarily. DB have the backing and support of ANZ, so possibly carry a bit more weight when it comes to obtaining firm allocations.

You have to remember, the vast majority end up with the lead organisers and the top distribution channels, and in this particular case, I would think a lot of insto's would have been in for it, having been harshly scaled out of Meridian.

It is not an even playing field, thats for sure

[JimHickey]

"ASB Securities did contact a small group of clients (namely for our Margin Lending and Nominee Clients) to register their interest in the Broker Offer. We placed a bid for shares, and unfortunately this was severely scaled. I am sorry, but we are unable to accept any further interest in the Broker Offer."

[Xerof]

"ASB Securities did contact a small group of clients (namely for our Margin Lending and Nominee Clients) to register their interest in the Broker Offer. We placed a bid for shares, and unfortunately this was severely scaled. I am sorry, but we are unable to accept any further interest in the Broker Offer."

Jim. this seems to back up my thoughts one post ago. I presume you have spoken with Victoria Ready?

[JimHickey]

Yeah. Id say that they were wanting more fees than other brokers, hence the smaller allocation

[Xerof]

Smaller broker bidders are best to be a price taker, get a fair amount, even if scaled, and be happy with the brokerage fee, rather than try to finesse the pricing

tsk tsk

I haven't heard from my broker yet, so I just sent him this

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