So your saying it's going down to 10c to just $170m marketcap?
Comcast bought Sky UK for circa NZD $55,000,000,000 just 24 months ago.
What would you rather have? Sky UK or Sky NZ 323 times over.
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Twenty years ago I would of been angry, but now just take it in my stride:). Have bought 15 blocks of shares since 5/5/20. Two of those blocks where SKT, just took a side step on 12/5/20 for a gamble. Have locked in $49,000 profit after fees and losses since 1/4/20. The other 13 blocks are in a much safer company and are already in the green about $8000, so all good and happy over here. As for SKT, you can have my entitlement offer, I am too busy buying into my next punt;).
On the off chance this information is helpful to anyone else, I contacted Sky's investor relations to clarify some details around the process for applying for new shares and payment.
This is the response I got:
"Thank you for your email.
You are correct in saying that the Retail Entitlement Offer will open tomorrow (Wednesday 27th May), and that applications must be made by 5pm (NZST), Tuesday, 9 June 2020. The payment is due by the same time of 5pm (NZST) on Tuesday, 9 June 2020, and is held in trust by Computershare until settlement on the 16th of June which is when the New Shares will be issued to you.
We do strongly recommend direct credit payment to negate any possible delays with cheque delivery and processing."
So it seems that you can apply for your shares online from tomorrow (https://www.shareoffer.co.nz/sky) but only have to make sure the money is sent through by the closing date 09 June. Best to transfer the funds by DC if you can on 08 June I think to ensure there are no issues etc.
Initially I thought that you might have to credit the funds at the same time you submitted the application, but that does not seem to be the case.
Anyway, hope this is helpful.
Sharesies just sent out their email regarding this Rights Offer now and that you can apply for your allocated shares from now until 5th June.
Thanks for all your posts mistaTea I have found them very helpful, cheers :)
I'm with ASB Securities so if the offer goes through, will they eventually show up in my portfolio on there? Haven't participated in one before.
Thanks
Just did a practice run for some shares I hold in a separate brokerage account for my son - 1,000 shares. Not sure if buying Sky shares for him makes me a good father or a bad one! Ha!
Anyway, the process was very straightforward. Applied for the maximum 3,396 for him, and received payment instructions on application submission and then again by confirmation email.
Send them another email asking if institutional investors have already used up (or been offered) their 20% over subscription entitlement as part of the institutional entitlement offer.
In other words, if there is a shortfall with the retail entitlement, will retail investors who elected to subscribe for an additional 20% effectively obtain the balance from other retail investors. Or will any short fall of the retail entitlement be allocated between both institutional and retail investors combined.
There is a difference, as there's only $38m available. Likely won't be many scraps left over.
I say cut out the middle man and hit them up with any questions you have directly. They tend to reply promptly, and their response may generate more questions from you, so might be easier to have a direct line of communication with them.
Investorrelations@sky.co.nz
Yep, but no takeovers have been forthcoming so far (much to my surprise) so the likes of NBC don’t see the value perhaps?
If they were going to make a move as you suggest, they wouldn’t want to thumb suck too long. When Sky start to grab a meaningful portion of the broadband market, the takeover price will increase significantly.
I imagine all of the ‘new’ Investors coming in @12c would be very keen for a takeover within a few months.
If the shares trade 20c+ after the CR is done, then a premium for control would be 30c+ surely.
Not bad if you can damn near triple your money in short order.
Rumor has it that a sale of Mediaworks TV assets is close to being done, hence why no redundancies were made in the recent restructure.
Will the buyer be an Australian based company, ie SevenWest, Nine, or an American media conglomerate ie Comcast, AT&T, Newcorp, Discovery.
With a strong USD you can pick up overseas assets for a lot less. The larger the company the more efficient the costs are, more vertical integration.
Sky share price down over 80% since Martin has taken over as CEO. He doesn't care about shareholders at all. The dividend payments should have been retained, even if it was as low as 4c/share. Sky is the definition of a penny stock now. Almost makes you want to say, "bring back John Fellet."
Yeah, and I expect Black Crane will have taken their maximum possible entitlement too with a view to influencing the company in such a way that a deal can be done in reasonably short order. If NZR and RP weren't able to take their full entitlement, I am sure BC would have been happy to help them out!
Sky cutting damn near $100M in costs to become a leaner machine, one now with lower and more manageable debt will make it easier for the likes of BC to extract maximum $ from their holding.
I see a bunch of people in Sky Sport are getting the sack. OSB will no doubt be given the flick soon too.
Yes and no.
I think it is absolutely true that John was overly cautious on cannibalising his high margin satellite base. And in hindsight, there were many moves that could have and should have been done sooner.
But it is also true to say that John was trying to maximise shareholder earnings in the face of a changing landscape - and he did have an obligation to maximise shareholder wealth, it doesn't necessarily mean he intentionally 'ran the company into the ground' in an attempt to just get one or two more puffs from the cigar butt before he threw the stogie in the gutter and buggered off.
He knew that the launch of OTT providers like Netflix was going to be bad for Sky, and that there would be other entrants over time since it is such a cheap distribution model.
He did release NEON very early on (2015). Unfortunately the first version of NEON was really bad to to use, and he did not put that much content on so that gave the app a bad reputation. So yes, NEON should have had much more focus. Sky GO also needed more updates and faster.
However, in the face of this new reality, John found a fantastic opportunity to merge with Vodafone in 2016. This move was the natural next step for Sky, and would have 'solved' their problems. It was a great deal and would have been awesome for consumers, but alas it was not to be. Some pundits report the merger attempt as a desperate attempt by an old white man who was clueless as to what to do next - but that is not true in my view. It was a well thought out plan that was a win-win for both companies and consumers.
Once that failed, John did do some tinkering (splitting up the Basic package into Starter and Entertainment, launched a Box Set sub for NEON at 11.99/month, and a Mobile-only FANPASS for $15 or so...). However his 'last hurrah' was supposed to be the merger. Once that failed, to be fair to John, he did acknowledge that he was not the best person to lead Sky into the future and they recruited Martin.
Personally, I am a fan of John Fellet and I admire the profitable business he built. He is also a Warren Buffett fan, and would model his shareholder letters in the same way Warren would - and if you go back and read John's letters, they provided a very good education on the media sector (i.e. he did not just give the standard spiel of "we made this much money, this our our EBITDA, growth of x% blah blah blah).
Hindsight is a wonderful thing, and I am sure if we had the opportunity to grab a beer with him and discuss his tenure he would be very candid and point out a number of things he could have done differently. Rightly or wrongly, I am still a fan of his.
Sometimes though I think the shares they hold hold more value to them so they gouge the business. Exit and sell the shares before people realise the businesses shape
For sure, but John never held a material amount of shares. He only had a couple hundred thousand or so, and he still held them when he left.
Even if he sold them, in relation to his pay packet the $400K worth of shares at the time was not a massive inducement for him I don’t think.
His lack of owning a material amount of shares (as well as the new lot) is a bone of contention though. He needed more skin in the game and so does current management (I just wish they weren’t getting it @12c per share when they never had any skin in the game to start with).
Fellet and team hung onto Sky monopoly situation in NZ far too long without taking notice of emerging online/digital trends in the media and not being proactive. Instead they were just too greedy and now the mess.
Has anyone heard if we are guaranteed our full allotment of 2.83 to 1
Appreciate the comment Felonius. I should point out (before I get trolled) that John is not my dad or any other kind of relation. He is not a family friend, and I have never had the opportunity to meet the man.
I just think that people tend to have 20:20 hindsight vision, and look back with a very 'black and white' view of events. The reality is there are a lot of grey areas, and if one put themselves in the CEO position at the time - you would realise that there were no easy decisions.
Maybe one day I will get the opportunity to watch a baseball match and chow down an American hotdog with John. Oh how I would love to pick his brain...
Good assessment mistaTea. John Fellet gouged the customers to look after the shareholders. But he put shareholders at number 1. Part of the reason why Sky is valued piss all is because the market does not have a whole lot of faith in Martin. He might be good for customers and sports bodies but he is not good for shareholders. Best we can hope for now is a takeover. The next best would be resumption of dividends.
Good Fellet post mistaTea
Freakin La La Land at the moment.
Still in the green tho.
Like I said, needs a few weeks to settle.
Probably get dumped a little for the next few days or week or so
New investors & institutions will be allotted their shares & start trading on 2 June. So next week will see what they are going o do with their 12c shares.
Retail investors however will only get their shares on 16 June - 2 weeks later!
So retail investors will have an interesting 2 weeks to watch the share price action before they get their allotment and shares.
As far as I can see, the shares have effectively been trading "post issue" since Tuesday.
Settlement is 2 days plus trade.
New shares get issued tomorrow.
Sophs have been trading contracts, not the shares.
How else do you get 10m volume daily on here.
Pure manipulation.
The whole thing has been a crock of ****. Us retail holders who really NEED TO participate do not get their shares to June and then by then the share price will probably be under 10c at the rate its going- not happy.
Do you think some retail investors will be selling today at 15 and then buyback this week or 12? Might that have a connection on the downward share price today?
We have till 9th of June to decide. Who knows it might be less than 12 cents/share by then.
I have no idea why a 2.83:1 issue at a third of the price is even legal. What a bloodbath.
I think it's just 'new' investors taking their very nice 25%+ quick profit, courtesy of a grossly unfair capital raising structure in favor of institutions.
Remember that there are 178m shares issued to new investors at 12c.
In their shoes and in the market conditions we are in, who can blame them for taking their profits?
The issue should be like they were in the old days - a pro-rata issue to ALL shareholders at the same time.
It's clear that the structure is to suit the company, underwriters and institutions - bugger the small shareholders.
Yes I suspect there will be a reasonable element of that.
It is frustrating how some of these institutions and insiders are going to benefit from the deal.
However, remember your circle of influence and circle of concern!
I’ve noted the injustice. I’m not particularly impressed. But I’m not going to dwell on it because it doesn’t really help me.
still can not believe it that anyone would buy SKT shares....:eek2:
Let's get things in perspective people!
The Kathmandu TERP was NZ$0.72. It traded down to $0.62 (13% drop)
The Sky TV TERP was $0.17 and it's now down to 14.6 (14% drop)
Kathmandu also opened strongly after the placement and traded down in a similar pattern to Sky TV.
The overhang stock on Kathmandu was eventually absorbed by new institutional investors, Norges Bank etc
The point is, is that this is very normal trading behavior. There's too much downside pressure with all the shorting and short term profit taking going on.
Give the stock time to churn and it will bounce back strongly once all the weak hands have been shaken out.
I keep saying give it time. 2 weeks minimum. By mid July it will be 21+. You read it here first.
People will buy anything if you put a price on it.
Just $254m market cap at today's closing price.
Only $11m debt.
2021 EBITDA forecast range of $100–130m
Sky is a household name in New Zealand. It's a profitable business. Over 1 million customers. Many bandits have falsely called the end of the company for many years but have been wrong. A major restructure of the capital has just occurred. Very interesting time to be an investor. Comcast recently bought Sky UK for $39B. Active investors like Black Crane have entered stock recently and see potential. If this doesn't get you excited then nothing will.
If it is so rosy..then the SP won't be falling everyday....since the last 5 years.....please....
Here's an extract from two Kathmandu SSH.
https://i.imgur.com/YOMHs5E.jpg
It shows Morgan Stanley purchasing 2 million shares at 50 cents on the 2nd of April from the institutional placement.
Derivative contracts are then created with clients the same day. Effectively stock is borrowed and sold on market instantly, using collateral from the parent company.
Kathmandu resumes trading at around TERP. Over the coming days the stock drops as shorts are sold to new unsuspecting retail holders.
Kathmandu drops to 60.
Retail clients began to sell, and are less likely to participate in entitlement offer.
Stock is then repurchased on market at a discount and returned to Morgan Stanley on the of 9th April.
Traders then began to build a net positive position.
Retail entitlement is underwritten.
Morgan Stanley releases research report and "buy" recommendation.
Stock surges to $1.
Retail holders left wondering what the hell happened.
Typo above, actually 4m shares at 50c for $2m.
This is just one company (Morgan Stanley), who happened to go over 5% and had to disclose. Doesn't count all the other institutional firms doing the same thing under the table with Kathmandu.
Take a look at shortman:
https://www.shortman.com.au/stock?q=kmd
1/3 of the company was sold short just after the placement. That's absolutely ridiculous.
Moral of the story is that Mr. Market is irrational.
I don't care if the stock drops below 12. I'm still going 120% in the entitlement.
I hope I can get 120% too...
https://www.google.co.nz/amp/s/www.n...ne-foxtel/Amp/
I expect Sky to negotiate similar broadcast extensions for NRL, rugby etc.
Sky will agree to a smaller clawback than they are entitled to so that the codes remain viable.
In return the codes commit to an extension on reasonable terms.
However if you type SKT into shortman, it shows that SKT is not short at all... https://www.shortman.com.au/stock?q=skt
Might be one to keep an eye on in the coming days though.
In an environment where most shares have rallied 30% plus since March, it’s amazing watching the confirmation bias going on here!!
30%?
A debt free, profitable, dividend paying, low production cost gold miner like Evolution is up a lot more than that, selling a product for which demand is increasing, while the outlook for costs like labour and oil look as good as they have in ages.
A nearly debt free, profitable, dividend paying company like Kogan.com is up well over 100%, with a tailwind behind them and demand increasing and their distribution method becoming just as popular as it is cost efficient.
In neither case does the supplier sell a product where you can shift to a free version and get better selection and service than you got from the paid incumbent, who continues to dinosaur their way through life with an expense structure completely out of whack with the younger buyers' price expectations and a content distribution model that simply makes no sense in 2020.
Great post Stranger Danger.
Kogan, just lol.
Kogan was OK 10 years ago but only because it gained a huge following as people used it to avoided GST. It's a dodgy company with dodgy owners. They went public so founders could sell down which they have been doing. It continues to do all these acquisitions and horizontal moves into new product lines but it's all an excuse for lack of actual growth. Total bubble and receipt for disaster.
Seems like UBS has been shorting a few....
https://www.nzx.com/announcements/353928
I actually agree with you. Kogan was carefully chosen as my example as it is NOT perfect. When comparing against Sky TV, it would be cruel to use Netflix or Apple or something.
I entered Kogan at under $5.00. In my analysis, I had just as many "cons" as "pros" - record of insider selling, record of CEO being a spinner, Amazon threat, technology stack dated etc etc.
However, the positives coupled with the likely operating and competitive environment (eg "the world outside", which is why Sky is doomed) along with a reasonable price allowed a purchase.
My return expectation was 100% over five years, or 15% per annum compounded annually, plus dividends.
Some aspects of my thesis started to play out (or at least be noticed and priced in) far quicker than expected.
The CEO and 2IC then gave themselves a truly disgraceful options package using the Covid19 "panic" period to gift themselves a swag of options at $5.30 or so when the share price was nearly $9.00, the only performance criteria being to stick around, redirecting a lot of the future upside to themselves.
The momentum crowd continued to bid the shares up. I exited this week at over $10.00, my return expectations more than met very quickly, and the "key man" risk proving out even earlier than expected!
Kogan.com is NOT perfect - miles off it. But you could construct a list of rational pros that allowed a purchase.
I simply can't do that with Sky.
P.S See how I sold when an identified risk showed up? You're allowed to sell, Sky TV folk...
Mind you ASX runs on sentiment rather than fundamentals. Look at Afterpay and other BPNL stocks.
Well, it is a good thing you don't own any SKT shares then. Nothing for you to get hot and bothered about mate.
My underlying thesis for Sky has not changed. In fact the company's financial performance and subscriber growth has exceeded my assumptions (so far).
Of course, if the 'story' for Sky changes for the negative then I will sell my shares. Even if that means I have to realise a loss. Just like Buffett did recently with the airlines.
It's not actually shorting.
The parent company has bought stock in the 12c placement.
It has then lent the stock out, to a borrow, at interest. Who? Nobody knows.
You can only assume it's being sold on market as the volume of the stock surges, and the price drops by millions.
You get 4 business days plus a trading day before you have to report anything to ASIC. Throw in a weekend and then report at the end of the last business day and it's more than a week before anybody knows what the hell is going on.
That's not the worst part. The borrower and lender are related. It's like doing the above but with your Dad.
O look, the stock is up, what a surprise.
That is a heck of a lot of stock being offered at 15 at the close today. Monday will be interesting.
Will probably drop monday. Friday will be interesting though
The large institutional parent companies have instructed their traders to keep the price of SKT suppressed during the retail entitlement phase, so that a shortfall arises and additional shares can be underwritten.
This is what happened with Kathmandu. It was artificially manipulated by excessive short selling.
It's a fact that only 51% of the retail shareholders of Kathmandu elected to take up their entitlements, luckily it was 82% after over subscriptions. Even so, this still created a shortfall of 19 million shares. These 19 million shares have generated an additional $10m in profits for institutional holders who underwrote the shortfall.
I suspect more shorting on SKT next week. I also suspect an approx 40% shortfall in the SKT retail entitlement if the price continues to stay suppressed at these levels. This doesn't actually bother me as it greatly increases my odds of getting 120%. Sub 12 would be nice, but 15 should be more than enough to achieve it.
https://www.asx.com.au/data/shortsell.txt
2m shorts yesterday. Suspect more in derivatives, swaps and other instruments. Likely 10m shorts today. We won't know the full picture until 8 days later on shortman. Safely assume 80% of trades now are fake and short selling.
Gee I truly hope it works out for you, that’s a sizeable chunk on top of your existing holding to have in one company with an almost 6 year track record of shareholder wealth destruction.
I honestly do hope it works for you, though it’s way too risky for me. All the best.
http://www.stuff.co.nz/sport/league/...id=app-android
Great promotion from sky. Just need to get it out there.
I agree. Saw a deal for half price sports now I was thinking of getting. Today will help me decide if I go through with it. Love my league and with rugby also starting up, I have my fingers crossed it doesn't have any issues with potentially a large number trying it out today
I use sky go and neon. Huge improvement from a few years ago. Biggest thing is the casting function so it doesn't have to be on your phone
Yeah both products are a lot better now. NEON is still not as good as Netflix (they have set the bar) but it is definitely better than the 'bad old days'.
If you are not a Sports fan, you can currently get a very comprehensive entertainment package from Sky for $65.44/month ($2.15 per day).
Sky Starter + Entertainment from Vodafone TV (which means no MySky fee) = $51.49 per month. That provides a very large range of entertainment, kids channels, documentaries and news channels.
Then you can add NEON for $13.95 which pretty much gives you SOHO + Sky Movies. The NEON app on VTV works well.
Thats what I have + Sky Sport. My total package is $97.43/month (which works out to be about $3.20 per day). Less than a cup of coffee and there is something for everyone in my household. We utilise a lot of the content on offer.
Bidding SKT to over 40 cents and then a rights issues and supposedly zillions being shorted and it seems wholesale market manipulation going on I just keep up.
Question .is this a game everybody wins and no losers ....meaning I’m missing out on the fun.
Or are one or two making zillions while everybody else loses heaps
Just reading a piece on Trustpower...
"More than 50% of Trustpower’s customers now take more than one utility service, and the more than 100,000 broadband customers reflects both the quality of the network offered by Trustpower as well as price."
If Sky could get 50% of satellite subs to take up Sky Broadband as a starting point, that would be over 250,000 Broadband customers. Not a bad start, and I expect a fibre-entertainment bundle would be more appealing that an fibre-utility bundle.
And then there is large room for growth beyond the satellite base of course.
It's simple really.
Given the EBITA and market cap, you win if the company survives the next 1825 days (5 years).
So if in the year 2024 everyone is streaming the Paris Olympics then you lose.
I'm betting that nothing significant will happen in 1825 days. Just like nothing significant happened in the last 1825 days.