SKT - Sky Network Television

[LoungeLizard]

Despite a pretty good result the SP is taking a beating. Low volumes as noted, but can't help but think that the market is not that happy with the share cancellation scheme. Maybe a special dividend would have been better after-all?
Not only do we have to wait (again) for the payment but there's uncertainty - in my mind at least - as to what shareholders will actually get and what will happen to the SP once shares are cancelled.
MistaTea - how do you see things panning out in November, in terms of the above?

[mistaTea]

Despite a pretty good result the SP is taking a beating. Low volumes as noted, but can't help but think that the market is not that happy with the share cancellation scheme. Maybe a special dividend would have been better after-all?
Not only do we have to wait (again) for the payment but there's uncertainty - in my mind at least - as to what shareholders will actually get and what will happen to the SP once shares are cancelled.
MistaTea - how do you see things panning out in November, in terms of the above?

I don't think there is any uncertainty about how much each shareholder will get as payment via capital return.

Every shareholder will get the equivalent of 40cps paid out based on current shares outstanding.

The only thing we don't know yet is what % of shares will be cancelled and therefore how much per cancelled share will be paid.

But that is irrelevant in terms of total amount that gets paid.

I don't think a special dividend will have made any difference to sentiment.

Very low interest on the buy side right now seems to have pulled the SP down.

Perhaps guidance for next year has fallen well short of whatever Mr Market was expecting?

I have never been good at assessing/predicting Mr Markets moods. For all I know, the SP could bounce back somewhat again for no obvious 'reason'.

[Mysterion]

Despite a pretty good result

[LoungeLizard]

I don't think there is any uncertainty about how much each shareholder will get as payment via capital return.

Every shareholder will get the equivalent of 40cps paid out based on current shares outstanding.

The only thing we don't know yet is what % of shares will be cancelled and therefore how much per cancelled share will be paid.

But that is irrelevant in terms of total amount that gets paid.

I don't think a special dividend will have made any difference to sentiment.

Very low interest on the buy side right now seems to have pulled the SP down.

Perhaps guidance for next year has fallen well short of whatever Mr Market was expecting?

I have never been good at assessing/predicting Mr Markets moods. For all I know, the SP could bounce back somewhat again for no obvious 'reason'.

Well, that's sort of what I mean in terms of the uncertainty - the % of shares cancelled determines what shareholders will receive for each share. And we don't know that yet and probably won't know for some time. Am I missing something here?

[mistaTea]

Well, that's sort of what I mean in terms of the uncertainty - the % of shares cancelled determines what shareholders will receive for each share. And we don't know that yet and probably won't know for some time. Am I missing something here?

No you do know how much $$$ you will get.

Just multiple your current number of shares owned by 40c.

[LoungeLizard]

No you do know how much $$$ you will get.

Just multiple your current number of shares owned by 40c.

Cheers! If that's how it works out - courts/IRD/ shareholders vote permitting, I will be more than happy.

There certainly is no rhyme or reason why the sharemarket behaves in the way it does -  a 7.3 c
dividend plus a 40c payout is announced and the SP drops 18c!   

[Mysterion]

Cheers! If that's how it works out - courts/IRD/ shareholders vote permitting, I will be more than happy.

There certainly is no rhyme or reason why the sharemarket behaves in the way it does -  a 7.3 c
dividend plus a 40c payout is announced and the SP drops 18c! 

Markets are forward looking!

This is normal share price action for Sky.

• Good news = down
• No news = down more
• Bad news = down lots

The only exception = Takeover talk

[mistaTea]

Cheers! If that's how it works out - courts/IRD/ shareholders vote permitting, I will be more than happy.

There certainly is no rhyme or reason why the sharemarket behaves in the way it does -  a 7.3 c
dividend plus a 40c payout is announced and the SP drops 18c!   

Ogg's post is right about the markets being forward looking.

Based on guidance, the market is saying that sky tv is only worth about $340M ($420 market cap minus the $82M total payout expected this year).

Everything (dividend, capital return and future FCF) is priced in.

That's the theory anyway, but then this is sky tv. The fact that the SP was $2.75 just a few days ago is bizarre. It's just that, beyond a year or two, it is hard to predict SKT earnings with confidence. That doesn't mean earnings out into the future won't be healthy (I happen to think it will) it's just they the market can't be certain from where we are today.

So you get this massive volatility as it grapples with what sky is worth.

Management have done well though - I do feel for them in situations like this. They are doing all they can, and on balance have delivered a really solid result. So it must be perplexing for them to see the SP crash after initial market enthusiasm when the results were released

They have done everything the market and shareholders have asked for - including the reinstatement of a dividend and large capital return payment!

[Jay]

Hopefully it will rise again closer to the payout date and/or Nov 2nd... we hope/pray 

[Mysterion]

This exact date last year the CEO and Chair both bought on market.

Will they do so again this time?

CEO on a million dollar cash salary.

New director on board too.

Large on market purchase >$100,000 = Good
No on market purchase = OK cause takeover might be happening
Small on market purchase =

[Mysterion]

TVNZ profit drops $51m as operating costs surge

https://www.nzherald.co.nz/business/tvnz-profit-drops-51m-as-operating-costs-surge/TYS7VFHLHZNHYEFQJ2BDEMLZHE/

[mistaTea]

This exact date last year the CEO and Chair both bought on market.

Will they do so again this time?

CEO on a million dollar cash salary.

New director on board too.

Large on market purchase >$100,000 = Good
No on market purchase = OK cause takeover might be happening
Small on market purchase =

With the latest drop in quoted value, despite Sky delivering solid results and distributing cash like the market has been telling them to... if anyone still had any doubt in their minds about whether or not the Board should sell the business...I would think that doubt has been removed now.

Sky TV is going to continue to be an important player in the NZ media landscape for many years to come. And to the right owner, I think she has the potential to be an incredibly valuable asset.

But as a listed company? No way - it won't matter what Sky do, there will always be a built in pessimism about her future prospects.

And make no mistake - a low market value is not just an abstract thing that does not impact Management. It absolutely retards Sky's future growth prospects because the amount of money that can be borrowed (and on what terms) is dependent on thr quoted value. So as Sky's ability to fund meaningful growth is inhibited by a pessimistic Mr Market, it becomes a self-fulfilling prophecy and she will continue to disappoint.

A cashed up Private Equity outfit on the other hand, could supercharge growth and provide Sky with a lot more options going forward.

If it were me, and I was interested in buying Sky I wouldn't muck around waiting for the cash to be returned first.

I would just make an offer (I think we would be lucky to get $3/share) and then pump the undistributed $70M into the key growth areas. Kiwi dollar low right now too, so NZ$3 per share is a paltry US$1.84/share right now (US$321M). Peanuts for these guys, and good value if they believe there is upside to Sky TV.

[Mysterion]

With the latest drop in quoted value, despite Sky delivering solid results and distributing cash like the market has been telling them to... if anyone still had any doubt in their minds about whether or not the Board should sell the business...I would think that doubt has been removed now.

Sky TV is going to continue to be an important player in the NZ media landscape for many years to come. And to the right owner, I think she has the potential to be an incredibly valuable asset.

But as a listed company? No way - it won't matter what Sky do, there will always be a built in pessimism about her future prospects.

And make no mistake - a low market value is not just an abstract thing that does not impact Management. It absolutely retards Sky's future growth prospects because the amount of money that can be borrowed (and on what terms) is dependent on thr quoted value. So as Sky's ability to fund meaningful growth is inhibited by a pessimistic Mr Market, it becomes a self-fulfilling prophecy and she will continue to disappoint.

A cashed up Private Equity outfit on the other hand, could supercharge growth and provide Sky with a lot more options going forward.

If it were me, and I was interested in buying Sky I wouldn't muck around waiting for the cash to be returned first.

I would just make an offer (I think we would be lucky to get $3/share) and then pump the undistributed $70M into the key growth areas. Kiwi dollar low right now too, so NZ$3 per share is a paltry US$1.84/share right now (US$321M). Peanuts for these guys, and good value if they believe there is upside to Sky TV.

[mistaTea]

I would reach out to Bowman and tell him to sell Sky...

But pretty sure it will just end up like this with Bowman telling me that he can smell my stink.

[Cod]

Is not Osmium continuing with it's sell down, might we see a Substantial product holder notice soon, maybe that's why it took a tumble after the results, perhaps they were hoping for a takeover, like many others.