SPK- Spark NZ (TELCO)

[kiora]

https://www.goodreturns.co.nz/articl...or-nzx-50.html

"Spark NZ was the most heavily traded stock on a volume of 9.5 million, and it fell 2.5% to $3.59, matching the five-year low it hit this week. The telecommunications company missed its downgraded earnings guidance when it reported last week.

Harbour’s Solly said investors were wary of the capital costs for Spark’s planned datacentres. "

[Snoopy]

Harbour’s Solly said investors were wary of the capital costs for Spark’s planned datacentres.

.....but investors are not wary of the cost of Infratil planning new CDC datacentres on a 'build it and they will come' basis. Huh? Don't get me wrong, I am not bagging Infratil and I hope they do well. I want to invest in datacentres. But I prefer Spark's measured approach of having the customers signed up first before the build program is rolled out.

Plus, I like the idea of offering business a 'multi-faceted telecommunications package' rather than just data centre space. I realise there are risks going up against the multinational providers like Amazon Web Services and Microsoft Azure in data-centres. Perhaps after Spark's ten year customer agreements run their course, their datacentres will be too small and outdated, and the idea of a hybrid data centre (not favoured by the multi-nationals) will be passé? But if that happens, Spark can always sell the datacentres for alternative use and book the profits on what is becoming scarce Auckland industrial zoned land. And as far as the build costs for new datacentres go, Spark has already indicated that in 18 months time they will be looking to be partnering with others to share such costs.

All investments have risks and I would never advise going 'all in' on Spark. But I have a long term goal of perhaps moving up to 1/6th of my NZX portfolio into Spark shares. And I still have some way to go to achieve that.

Is this a case of "Silly Solly" making up a story to justify the movements in the Spark share price?

SNOOPY

[bull....]

https://www.goodreturns.co.nz/articl...or-nzx-50.html

"Spark NZ was the most heavily traded stock on a volume of 9.5 million, and it fell 2.5% to $3.59, matching the five-year low it hit this week. The telecommunications company missed its downgraded earnings guidance when it reported last week.

Harbour’s Solly said investors were wary of the capital costs for Spark’s planned datacentres. "

and funded by DRP and debt not the best way to fund growth ( probably why they jacked up the IRR to justify it lol ) . FCF would have been better , ahh but that been used to prop the div

[X-men]

Bet the harbour that pushed the sp down so they could buy more...

[Ggcc]

.....but investors are not wary of the cost of Infratil planning new CDC datacentres on a 'build it and they will come' basis. Huh? Don't get me wrong, I am not bagging Infratil and I hope they do well. I want to invest in datacentres. But I prefer Spark's measured approach of having the customers signed up first before the build program is rolled out.

Plus, I like the idea of offering business a 'multi-faceted telecommunications package' rather than just data centre space. I realise there are risks going up against the multinational providers like Amazon Web Services and Microsoft Azure in data-centres. Perhaps after Spark's ten year customer agreements run their course, their datacentres will be too small and outdated, and the idea of a hybrid data centre (not favoured by the multi-nationals) will be passé? But if that happens, Spark can always sell the datacentres for alternative use and book the profits on what is becoming scarce Auckland industrial zoned land. And as far as the build costs for new datacentres go, Spark has already indicated that in 18 months time they will be looking to be partnering with others to share such costs.

All investments have risks and I would never advise going 'all in' on Spark. But I have a long term goal of perhaps moving up to 1/6th of my NZX portfolio into Spark shares. And I still have some way to go to achieve that.

Is this a case of "Silly Solly" making up a story to justify the movements in the Spark share price?

SNOOPY

As far as I know Infratil do have their customers signed before they start to build the centre. Or at least they know customers will be signed before they are fully up and running. There is currently more demand than supply for them and they are turning business away, as in they can apparently be selective.

[kiwikeith]

https://www.goodreturns.co.nz/articl...or-nzx-50.html

"Spark NZ was the most heavily traded stock on a volume of 9.5 million, and it fell 2.5% to $3.59, matching the five-year low it hit this week. The telecommunications company missed its downgraded earnings guidance when it reported last week.

Harbour’s Solly said investors were wary of the capital costs for Spark’s planned datacentres. "

Spark are suggesting an IRR on the data centre investments of 10-15%. If SPK can achieve that sort of return, I am happy for SPK to spend capital in that area.

[kiora]

Is there a BIG difference between CDC & Spark data centres???

CDC provide building,power ,internet connection,water cooling & tie it up with long term contracts?

While Spark provides building,power ,internet connection,water cooling,racks & computing power ???

"This platform is expertly designed to replicate the compute, storage and networking "

https://www.spark.co.nz/online/large...-power-systems

Looks like they are not like for like?

[see weed]

Hi seeweed,
Nicolla willis here...you must be making heeps with your buying and selling and we here in the bee hive want our share so cough up buddy
藍藍藍藍
Unless of course your only buying for your retirement and then having to sell to buy groceries in these tough times

Hi ziggy415 lol. I have a good accountant for over 25 years, who did apprenticeship with the IRD as an auditor. So no problems there and live off the interest from investments but am down a wee bit on SPK but who isn't. If it goes any lower will have to start a 3.50s club.

[Jaa]

See weed, I joined the 350s club on close, thought the 370s club was already a bargain!

Data centre capacity is cheap relatively and over the medium term is a commodity. They are not that hard to build and there is a number of options even just in NZ.

The value is in the services to maintain and tune the servers and much more so the software and data that runs on them.

Spark's bundle of servers, telco and IT services is pretty compelling for most organisations. A one stop IT infrastructure shop.

[Snoopy]

Harbour’s Solly said investors were wary of the capital costs for Spark’s planned datacentres. "

Thinking about this comment a little more, it may have been Spark mentioning in their post results for FY2024 analyst news conference, that they were looking at bringing in partners to help build out their data centre portfolio in about 18 months time that fuelled this suggestion that Spark did not have the capital to roll out their data centre plan. Looked at in that light, this might have been the reason for Solly being 'wary' of capital costs. However, rival datacentre provider CDC started out on their data centre path by building their own data centres, but then selling the data centre buildings (while keeping the business) to fund building the next data centre. So there is a precedent for Spark to do the same, if required.

Investors seem very comfortable with Spark no longer owning their cellphone towers, while continuing to run the cellphone business. I can't see Spark shareholders being too worried if the data centres went down the same path.

SNOOPY