MUL - Multiemedia Limited

[stefan]

Re: MUL - Where to from here?

Well, that was just another one of those last minute sell off we've seen on MUL many times before. A few million shares traded within the last 15 minutes, mostly sellers. It's still in green which is something considering how the market went today. Anyway, they hardly ever release news on a Friday so we will have to sit and wait...

 

[Joe Blow]

Re: MUL - Where to from here?

Well, that was just another one of those last minute sell off we've seen on MUL many times before.  A few million shares traded within the last 15 minutes, mostly sellers. It's still in green which is something considering how the market went today. Anyway, they hardly ever release news on a Friday so we will have to sit and wait...

Yeah, it was a little disappointing to see that, particularly after the momentum it had built up during the day.

But as you said, it closed in the green so I it's not all bad. Tomorrow is another day.

I think MUL is going to see a fair bit of selling on any strength as the short term traders hop out and realise profits. I'm going to try and trade in and out of it a bit more and hopefully increase my stake.

 

[Joe Blow]

Re: MUL - Where to from here?

It does seem to have found real support at current levels.

 

[stefan]

Re: MUL - Where to from here?

Joe,

I wouldn't get in and out on MUL too much. This one has the potential to move fast and you could well be left out in the cold. I'm just holding, even if it's tempting to actually try and profit from its movement. Anyway, good luck. I think you're right. It has found support around these levels but I wouldn't bet on it if the figures will be overly disappointing. Let's just hope they can announce some good deals before they release their figures for 2004. That would eliminate any fears of a further down turn. I'm most positive on MUL and I can't see it going down the drain for now so I'm holding to really profit big time should it start to move up.

 

[stefan]

Re: MUL - Where to from here?

Interestingly there is an undisclosed bid on MUL at the current bid level which is highly unusual and therefore should be considered genuine in my view. Normally you would see those bids 1 or 2 levels below the current bid price but this time it's different. Will be interesting to see how big it is and if it really stays there.

I'm convinced that something is about to happen here.

Happy trading

 

[Joe Blow]

Re: MUL - Where to from here?

Interestingly there is an undisclosed bid on MUL at the current bid level which is highly unusual and therefore should be considered genuine in my view. Normally you would see those bids 1 or 2 levels below the current bid price but this time it's different. Will be interesting to see how big it is and if it really stays there.

I'm convinced that something is about to happen here.

Happy trading

Yeah I saw that U bidder appear too and was immediately sceptical because I've seen U bidders appear and disappear too many times on MUL.

But this one could be serious. There hasn't been too much selling today... I think the market is half expecting some kind of announcement soon re: contracts.

Let's hope so.

I'll feel a little more confident when there is more at market buying. Maybe it's the quiet before the storm?

 

[stefan]

Re: MUL - Where to from here?

Currently there is only the U bid left for MUL at .044 so lets keep an eye on it to see how big this order is.

I agree that volume is pretty low today so news are not that close. Considering how much MUL has come down over the last couple of months, It would now be at an interesting price level even if we know that they will produce a loss for 2004. However, we should also look back a bit on this one and take the famous findlay report as a guide.

You can download that report here:

http://www.multiemedia.com.au/pdfs/FINDLA~1.PDF

They predicted a 3.7cent/share profit for 2004. Therefore already management has not reached its goal. There are reasons why, including the quicker expansion the middle east and the opening of other beams in advance, but nevertheless, they failed to make money out of their business in 2004.

If we take their argument into 2005, then cleary they should be able to top the findlay report in 2005 as they now have more sorces for income than what findlay assumed when they created the report.

So:
For 2005 they are expected to make a net profit after tax of 82 million dollars, based on 4000 customers.

Reading the latest statements, management is talking about having "more than 1000 customer" already. This would be inline with the expectations for 2004.

Because of the higher cost involved to open up more transponders and the middle east market, they will make a loss instead of a predicted 34 million profit in 2004.

So they have not been able to produce enough income out of the 1000 customers in 2004 to cover for the additional expenses. They even had to rise money with some obscure fund rising, even so they still had millions of dollars in cash left over which they plan to use on other stuff.

The report is expecting a dividend of 2.3 cents a share for 2005, expecting a 9 cent/share profit. From that point of view, MUL is a bargain at its current level.

If we consider that they have a bigger potential from a technical point of view than what the Findlay report assumed, I would consider MUL to be a VERY HOT investment in 2005.

It all depends on what management will deliver over the next few weeks and months. The end of year report is most likely released in September and that could proof crucial. If they can come up with more deals before then, nobody will care much as money would finally be flowing.

If they can't, then MUL will go down much further, maybe even towards the 2 cent mark. This would have to be blamed on management and their greed to get rich quick with funny option deals. The market doesn't like these kind of things, especially if management fails to produce results.

I'm holding a big stake in MUL and I'm confident that they are able to produce the results. It may take a bit longer, but the potential for 2005 is very attractive:
Let's assume they can live up to the report and deliver around 6-7 cents a share. 8 times EPS would out the share price to 55cents. I wouldn't complain if that would happen... ;-)

I'll post more on MUL, but for now that's more than enough reading for the day ;-)

Happy trading

 

[Joe Blow]

Re: MUL - Where to from here?

Great post on MUL Stefan. I agree with virtually everything you said.

There are a lot of people out there who hate MUL. Some of them got burnt back in 2000 on it. Some of them don't understand their technology or the market for it.

In my view, at current levels MUL is one of the best speculative buys on the market. It's also one of the best trading stocks around.

All in all, I've done quite well out of it.

And I'm still holding!

 

[Guest]

Re: MUL - Where to from here?

MUL have signed on many ISP,S over the past six months . who in turn are promoting their services . Some affiliated and interesting sites to look at
www.bushtech.com.au
edgeaccess.net
www.apertura.com.au
www.transcom.com
www.peopletelecom.com.au
www.truebroadband.com.au
Other probable affilliations,
Soul Pattinson Communications
Airworks Media Pty Ltd.
Harris Technology
www.broadbandwireless.com.au
www.satig.net
Each of these are signing on MUL,S services, and there are probably many more around . It will be quite easy to rack up 1000,s of clients with minimal effort from MUL itself. I have found this information with minimal effort through GOOGLE . A lot of homework has been done and it would appear only time is needed for their shares to make solid gains .
Incidently ,I hold some shares bought in 2000 at around 75 cents . I held and in 2002 was offered 100,000 shares at 1.5 cents direct from the company , some of which I sold at 10.5 cents to take up issue at 6 cents in October 2003 .My shareholding has basicaly paid for itself . These shares are ready to go places. Regards, KOOKA

 

[stefan]

Re: MUL - Where to from here?

Hi Tony,

Interesting comment. Yes, you're right regarding the 1000 customers. It's really more of a question if they can produce the growth neede to create a profit out of their services. One problem I see is that they have done more on the technical side by opening up markets that they didn't plan to that early. This is costing a lot of money and may take longer to turn it into a profit.

I do agree with you that time is the key. It is currently valued according to what it is right now. Not what it has the potential to become. This is why I'm holding big on MUL. It could become extremly rewarding once they step out of the shade.

I am however very negative about their management. These guys are just a bunch of clowns and they will need to proof themselves first before I give them any credit. All they have proofen so far is that they are keen to make a lot of money for themselves with all those stock option deals they've come up with.

I normally wouldn't invest into a stock with a management like MUL's but the outlook for this solution is just too good to be ignored. They may actually find that their market is much bigger in the Middle East than in Australia which may turn out to be an even bigger plus for its share price. There is virtually nobody around to compete with MUL in those countries.

All in all, MUL will either be my best investment ever (so far its been exactly that) or I may have to take up a second job to cover my losses...

Happy trading

Stefan

 

[Guest]

Re: MUL - Where to from here?

Hi. Stephan,
I don,t think the management are that bad, after all Ballantine is the person who started the buisness , and has been there for 20 years . But it is the lack of information that is a real annoyance . It,s hard to make an informed decision on speculation. One good point with MUL is they have about $10 million in the kitty which is enough funds for about 18 months running costs . We have plenty of time to jump ship if things become suspicious .
Tony

 

[stefan]

Re: MUL - Where to from here?

Tony,

I don't agree as far as management is concerned. So far they have failed to proof that they are there for the company and it's shareholders. The only thing they ever did was working for their own benefit, making sure that they each have enough shares (without substantial costs for themselves) to get VERY rich once the price goes up. They have come up with lots of option plans for themselves, calling it an insentive for management to work hard. That's just not true. Almost 100% of their options have been in the money already when they were released. All this is for, is to get rich quick. Not for the benefit of the company but for themselves.

I don't care if Adrian has been there for 20 years. As long as they don't act responsibly in the best interest of their shareholders, then there is no credibility.

Adrian Ballintine is getting paid 240K plus lots of options, all of them already in the money. Seriously, this is just a typical hightech company structure we've seen in recent years. Taking as much out of the company as you possibly can, just as if there is no tomorrow. (Let's just hope there is...)

Yes, they have plenty of cash and I'm very much interested to read the report for 2004 to see what changed in regards to salaries and cash.

I can't change it. Management has not proofen that they are serious. Not until they stop selling shares and stop trying to get rich quick via those funny option plans.

And yes, you are right. Their information policy is horrible. In fact we are all left in the dark as to what happened to that cash after they didn't proceed with the aquisition in the US. Strangely they have just rised another few millions all with option plans that are already in the money.

I'm happy to hear your answer to my points. Maybe I missed something that would indeed put these guys into a better spot.

I'm holding MUL because I believe in its product. So I don't sell. And neither should a director of the company.

Happy trading!

Stefan

How can a director (Clinton Star for example) be selling shares in a company he's supposed to lead?

 

[Guest]

Re: MUL - Where to from here?

Hi stephan ,
Sure i am not happy about their recent options issue , and it would have been fairer to offer all shareholders a slice of the cake .This would have entailed the cost of a prospectus and perhaps 4 weeks of time to fulfil raising such a nominal amount , time as I understand it was imperative to seal their RSSL deal . Until I can read their annual report to confirm otherwise , some shareholders have received a generous benefit from these options , but also I believe all shareholders will benefit in the future from this fundraising. In 2002 I took up an entitlement to 100,000 shares at 1.5 cents . They have been fair to all shareholders previouly .

Tony

 

[stefan]

Re: MUL - Where to from here?

Tony,

Your argument regarding the time and cost involved in a public offering are noted and that's what Adrian used as the argument in that interview he had recently.

However, my question is, if they really have 9 millions in cash, then it would have been SO MUCH quicker to just pay these 3 millions and then rise more money if that would be needed.

The way this looks to me is that there wasn't enough money (liquid) left so they had to come up with something to pay for this deal. And that's the scary part that we don't know until the report comes out.

I don't call it fair to offer a few shares every now and then to shareholders when they treat themselves like little kings. It's just not good enough when only the directors get rich. Even if lots of shareholders will get some nice money if this stock moves up into the 30cents area, these guys will be left with so much money that our profit will look like peanuts.

My point is that a solid, serious management would not try to profit on endless option deals before the company is actually making some money. Shareholders are interested in a solid, profitable business. Not in filthy rich managers. If MUL would be profitable then I would be willing to look at it from another point of view. But when the company is actually making a loss, then management shouldn't get ANY benefit at all before they turn the boat around. You normally get your reward after you delivered quality. Not before.

I strongly believe in MUL and I'm very positive that this product is great and unique in its performance. So by all means we need a bunch of professionals at its top. Nothing against Adrian. He seems to be the big guy but then you have to ask what all the other ones are doing there. Except for selling their shares like Clinton Star has done many times.

Well, MUL is my bet for August to become the top performer. It's going to be hard, but it's not impossible if we finally get some good news.

Happy trading

Stefan

 

[crocdee]

Re: MUL - Where to from here?

hi stefan and tony
just joined the forum. have been a holder of mul for a while at the moment not in the money however do agree that potential is there to make a good profit. also disappointed in management antics with share issues.
lets hope some good announcements come sooner than later ithink the share holders deserve a better deal here
regarde croc

 

[ghotib]

Re: MUL - Where to from here?

Do people see their gains coming purely from price movements, or do you see if as an ongoing business.

On 5 minutes reading - which is obviously much less than some of you have done - there are some colossal risks to the business. Political and economic instability in their anticipated growth areas, plus the possible impact of the US FTA are 2 that hit me in the face.

I know it's speculative, but still???

 

[stefan]

Re: MUL - Where to from here?

On 5 minutes reading - which is obviously much less than some of you have done - there are some colossal risks to the business. Political and economic instability in their anticipated growth areas, plus the possible impact of the US FTA are 2 that hit me in the face.

Interesting point regarding the US FTA. What makes you think that this has an impact on MUL? I so far couldn't see anything like that.

I certainly believe that this is a good product that has quite some potential in it. I do believe that this company has ongoing business that will substantially underline their growth over the next few months. If they can manage to sell this product then the next few years are looking bright. Hard to tell what's going to happen in this area of the market, but for now their technology is far superior to any other competitor like Optus or good old Telstra. Not to mention that the middle east/asian market certainly has a lot of potential.

I'm in because I believe in the product and the potential behind it. For this, I will be a long term investor. I have no intentions to sell on the first move. (Otherwise I would have done so when it was at 10 cents).

I have personally spoken to MUL about their solution at a very early stage before they launched it. I got all the technical details and I must say I did quite a bit of reading. Not to mention that communications is my daily business anyway. I've come to the conclusion that this one has potential that's not currently reflected in its share price, so I bought in for the long term.

Of course there are substantial risks in these kind of investments. A good product doesn't mean success. You'll have to sell it first. We don't know how well they are doing this at the moment and I have mentioned my disappointment in management in other posts. It all comes down to your personal style of investment. This is certainly not a safe play in anybody's terms. It just one that IMHO is well worh watching if you're after a high risk/high return stock.

 

[ghotib]

Re: MUL - Where to from here?

Hi Stefan,

My comment about the FTA was because I thought I'd read here that MUL had a new technology, which I took to mean that part of their potential growth was based on an intellectual property. IMO US patent law is as screwy as US copyright practice, and the FTA seems to bind us to both.

I've had a bit more of a look at MUL since my original post though, and it looks as though its new product is actually satellite based communication. Is that right? The only thing I saw that might be called "new technology" is Voice-Over-IP. That's actually a protocol and in the public domain. They might have some sort of proprietary implementation, but I didn't see anything on the website to indicate it. So I withdraw my doubts about the effect of the FTA.

However, one thing I noticed on the website was that twice they spell voice-over-IP as voiceover-IP. Call me picky, but I get nervous when a company can't spell and/or doesn't bother to proofread its own technical language. In a case like this one, where the technical language refers to a technology that looks like being flavour of some month pretty soon, it makes me suspect that marketing and sales have excessive influence on company behaviour. I know that must sound paranoid, but I earned my paranoia over 20 years in the software industry and communications is a very close cousin.

I haven't worked out the relationship with NewSkies or how MUL actually earns its money from the communications business. In one announcement I saw it seemed to describe itself as a reseller, and I don't understand how that fits with ownership of the satellite.
or what proportion of MUL's business derives / is planned to derive from which of its 2 business units. My guess would be that the hardware integration/distribution is supporting the communications. That might work, but it's a ferociously competitive field and if there's delay with the satellite stuff then they'd be in two ferocious competitions with, as far as I can see, no reasonably steady income stream at all.

This is all qualitative - I haven't looked at any of their financials and I haven't looked at any figures on growth of satellite communications. I'm very open to being convinced that there's a real business here, so fire away.

Ghoti

 

[stefan]

Re: MUL - Where to from here?

Ghoti,

I suggest you read more about MUL instead of me listing all the things that I might consider important.

Just a quick overview:

- MUL does not own any satellite. Instead they "leased" the beams that cover Australia, the Middle East and China. So what they are trying to do is selling the transponder capacities to resellers and directly to the public. Check other statements in this thread for details.

- Voice over IP as such is as you said just a technology to transmit voice over the internet via TCP/IP. Now the potential everybody is talking about in the industry, is that you don't need phone carriers anymore as one can offer VOIP much cheaper than normal phone calls. Well, I'm using Skype for me overseas calls but for now this is far from perfect. I don't actually see much potential in VOIP myself and MUL has so far not done much to push this technology. They didn't even implement it in the first phase. (Which is probably why they can't spell it correctly... ;-))

- Newskies is the owner of the NSS-6 VSAT Satellite that MUL is leasing the transponders on. NEWSAT is the company under which these services are offered in the covered areas. From the newsat website:
NewSat is a partnership of satellite broadband specialists. Together with NewSkies, ViaSat, Kavera, IP Access International and Advanced Projects, NewSat provides a range of next generation broadband solutions to Australia and 60% of the world's population.

I better stop now. This is post is getting way to big again.

Happy trading

Stefan

 

[Guest]

Re: MUL - Where to from here?

Ghotib, I have held stock in MUL FOR AROUND FOUR YEARS . Several trades over the years have given me healthy profits , and the holding I have has not cost me anything because of this . 5 minutes reading on this stock and you are an expert! Please do a little bit more homework before you denigrate others .