I get it now ......my maths upbringing only divided the 360 by 2 ...you missed th brackets out ha ha
Very sound logic though ....could be spot on
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Sure...any additional info Mr Market doesn't know yet or hasn't assumed yet will affect the price once it has become known to Mr Market (which often happens before us lesser mortal get to hear about it)....However Mr Market has factored some of this Comcom mess already...this mess is 18months old now...
Thats why my TA discipline is needed to make sure any loss is limited due to adherence to the stop/loss price...in my case outside the bottom boundary of the charted descending price channel...The length of time I hold CNU is unknown all depends on the market..I have no forward plans or predictions ...just react to the "now"..
EDIT when there is a test of support (207/209) there's a good chance of a "throwback" event to retest that support again....That will test my nerves
Just read a research report sent to me by one of the big broking houses on the impact of $34.44 copper pricing on Chorus.
Sobering as they are still working through the numbers but at the low end of the government proposed price of $37.50, CNU was already valued at $2.15!
Every 10c reduction in the copper price impacts CNU valuation by 23c from my reading of their report - so at $34.44, that's another 69c off $2.15 ...!!!!
Interesting times indeed
I'd love to know the details in the UFB contract. What levers can chorus pull to force government's hand?
Force Majeur perhaps - the comcom decision?
Even if the price reduction sticks, the company is profitable - if all of the reduction in EBITDA flows to after tax profit, the company will still be making $80m after tax (maybe justifies the current capitalisation at $840m)
Main problem seems to be that it has a $650m pa capex program that they will not be able to fund from cashflow given the $140m reduction in income.
Second problem is that step up to fibre is now more of an increase in cost for average punter so they could end up building the infrastructure but have a low uptake because copper is relatively cheaper (and not significantly worse in performance).
So a rational board should decide that the best way forward is to abandon UFB project entirely and get back to its knitting, delivering service over copper (at $80m profit). If only there was a way out of the contract...hmmm thinking caps on guys, lawyer up?
A cluster F*** in other words
Disc, holding, but nervously
I had a conversation with a journalist today and we talked about CNU and we both believe that the government will intervene. However, it was agreed that this was based on the Nats 2012. They've lost their mojo a bit in 2013. So it's anybody's guess.
Force majeure (/ˌfɔrs/ FORS, /ˌfɔərs mɑːˈʒɜr/ mah-ZHUR, or /məˈʒɜr/ mə-ZHUR; French pronunciation: [fɔʁs maʒœʁ]) or vis major (Latin) "superior force", also known as cas fortuit (French) or casus fortuitus (Latin) "chance occurrence, unavoidable accident",[1] is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term act of God (such as hurricane, flooding, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract. In practice, most force majeure clauses do not excuse a party's non-performance entirely, but only suspends it for the duration of the force majeure.[2][3]
Force majeure is generally intended to include risks beyond the reasonable control of a party, incurred not as a product or result of the negligence or malfeasance of a party, which have a materially adverse effect on the ability of such party to perform its obligations,[4] as where non-performance is caused by the usual and natural consequences of external forces (for example, predicted rain stops an outdoor event), or where the intervening circumstances are specifically contemplated.
ComCom - coming from left field with Bizarre price determination?