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NWT - Newsat Limited

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insto 'manipulation' is a whole different kettle of fish and if you think they are gaming the price to earn a scalp then you are wrong.

They have a mandate to hold the stock, so they want to buy. The manipulation might consist of pushing the price below daily VWAP in light trading, to execute as much volume as possible below/around the VWAP. If at the end of the day their avg price is below the VWAP then the 'manipulation' was successful.

Reverse for sells, if they have to unload some stock for redemptions then they might push offers high above the VWAP in light trading, to try and execute as much volume as possible above/around the VWAP. If at the end of the day their avg sell price is above the VWAP then the 'manipulation' was successful.

I believe Insto takes advantage of this known pattern and pushes a decent volume of stock into the bid side as it re-opens, then it snowballs on its own. If you sell 500,000 shares at an average of 80, then pick them up for an average of 70, there's your profit, all in a day.
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You might get a hedge fund or similar doing that, but no way an institution with a mandate to long stock is playing games like that.
 
Instos buy and sell when they need to buy or sell. When you have a significant chunk of shares your biggest concern is trying to shoe horn a position into/out of the stock without affecting the price. If you have a few billion under management would you really care about the possibility of making $50k on some $100m company. The majority of instos wouldn't even know what NewSat is.

Hedge funds might be, but I'd be pretty surprised if they were playing in a $150m company.
 
McLovin said:
Instos buy and sell when they need to buy or sell. When you have a significant chunk of shares your biggest concern is trying to shoe horn a position into/out of the stock without affecting the price. If you have a few billion under management would you really care about the possibility of making $50k on some $100m company. The majority of instos wouldn't even know what NewSat is.

Hedge funds might be, but I'd be pretty surprised if they were playing in a $150m company.
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What about the microcap funds? There's a few of them around.
 
Gringotts Bank said:
What about the microcap funds? There's a few of them around.
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What about them? You think they're going to risk losing their position in the stock scalping a microcap over a few thousand dollars? That is the domain of the retail investor with a few thousand dollars worth of shares.

There's easier ways to make a buck.
 
McLovin said:
What about them? You think they're going to risk losing their position in the stock scalping a microcap over a few thousand dollars? That is the domain of the retail investor with a few thousand dollars worth of shares.

There's easier ways to make a buck.
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If a microcap fund knew it was the only big player in a stock, they can set the price wherever they like, right? Can't they check the broker codes on the trades over a period of time and know that they won't get picked off by some other big player?
 
Gringotts Bank said:
If a microcap fund knew it was the only big player in a stock, they can set the price wherever they like, right? Can't they check the broker codes on the trades over a period of time and know that they won't get picked off by some other big player?
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Go check out the substantial holder announcements of microcap fund movements and see if your theories can be proven on the transaction records.

Like Allan Gray buying into MCE, PMP etc.
 
Well for better or worse I bought a sias holding today at 73c anticipating the fall, but it fell further than I thought! Probably fall further.

I want to have a few as we know they will have a capital raising at some stage later this year. It is difficult to hold too many shares till this occurs though. I think that is why the selling is occurring. It is time to take profits if you have a large capital gain. We are in a bear market after all.
 
Yikes.

Looks like my idea was way off, but let's check back in a year. Whatever the cause, the chart doesn't lie.
 
I sold out this week.

Really disappointed with the announcements this week. One week ago the cost of Jab-1 was like $450mill with possibility of having to raise up to $100mill. Now it's $600mill cost and $200m via a bookbuild which could cause very significant dilution, particularly if they have to raise at a 20% discount whilst the share price has fallen.

Will look to re-invest if and when they find the cash, and I know how many new shares will be on issue.
 
Post by Thinkthinkzeroon HC:

Announcing a defined-value bookbuild at a discounted-to-market price is naturally _only going to drive the price down_, requiring an escalating dilution the longer that state remains open.

So NWT haemorrhages value because the only real floor is actually off-market, at 80% of whatever the (haemorrhaging)market is willing to support.
Pre-existing holders get to hold the bag in favour of institutional interest, who make a killing in both the shorts and final owning.

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NWT are heading overseas next week to drum up a cool $200 million. If someone comes on board with that sort of money, the confidence around this stock will soar. Then again if they come up short...? High stakes poker.
 
Gringotts Bank said:
Post by Thinkthinkzeroon HC:

Announcing a defined-value bookbuild at a discounted-to-market price is naturally _only going to drive the price down_, requiring an escalating dilution the longer that state remains open.

So NWT haemorrhages value because the only real floor is actually off-market, at 80% of whatever the (haemorrhaging)market is willing to support.
Pre-existing holders get to hold the bag in favour of institutional interest, who make a killing in both the shorts and final owning.

--------------------------------------------
NWT are heading overseas next week to drum up a cool $200 million. If someone comes on board with that sort of money, the confidence around this stock will soar. Then again if they come up short...? High stakes poker.
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While most captial raisings are done at below market value to entice investors to pay for the new shares, it doesn't have to be that way.

Unlike your $2 mining explorer who wants a few $m to drill a few holes, there is a pretty well defined business case here. The leading banker/broker needs to work up the future cashflows and prospects and price it such that it offers a reasonable return to the investors as well as a reasonable deal for the company. Pricing the offer at an adhoc 20% discount to market is unlikely to win the arranger much repeat business, although it'd prove a popular offer.

Now - would anyone like to work up a business case for NWT?
 
The business case is great. Jabiru-1 expected to generate $3.5 billion revenue over 15 years at a 60-80% margin, $600mill of customer contracts already signed. Financed primarily by very low cost debt. Then more satellites at a similarly attractive margin.

IMO the issue is that the current market cap is $150mill and they need to raise $200mill in equity. A huge raising for a company of this size. So if the SP falls now to say 40 cents, and they are raising at 32 cents = 625,000,000 new shares. Conversely if investors are knocking the door down to be involved, and they raise the equity at say 80 cents it's only 250,000,000 news shares. A big difference in dilution for existing holders.

If they can't find the money in time the project could fall in a heap, and their existing teleport business is only worth around 19 cents/share.

Too much uncertainty at this point.

Please correct my figures if they don't make sense or are incorrect.
 
Junior said:
The business case is great. Jabiru-1 expected to generate $3.5 billion revenue over 15 years at a 60-80% margin, $600mill of customer contracts already signed. Financed primarily by very low cost debt. Then more satellites at a similarly attractive margin.
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$3.5B revenue over 15 years = $230m per year. At 70% margin = $160m. Take another $10m away for a bit of corporate leakage and pay 30% tax after allowing for $40m depreciation per year, that's ~$125m cashflow over 15 years. Discount that at say 12% you get a NPV of $850m. But the satellite itself costs $600m. So net NPV is only $250m in 2014. Take it back to today it's $200m.

232m shares on issue so ~86c per share + a bit of the existing resale business + premium for Jabiru-2,3,4 etc.

Let's just sa they raise $200m @ 60c that's 333.33m additional shares, bringing the total to 565m shares on issue. The project NPV is $400m, or 70c a share + various knobs and bobs.

Not greatly oversold based on my 10 minute assessment. You only need the discount rate to be 15% for today's price to look relatively reasonable.
 
skc said:
$3.5B revenue over 15 years = $230m per year. At 70% margin = $160m. Take another $10m away for a bit of corporate leakage and pay 30% tax after allowing for $40m depreciation per year, that's ~$125m cashflow over 15 years. Discount that at say 12% you get a NPV of $850m. But the satellite itself costs $600m. So net NPV is only $250m in 2014. Take it back to today it's $200m.

232m shares on issue so ~86c per share + a bit of the existing resale business + premium for Jabiru-2,3,4 etc.

Let's just sa they raise $200m @ 60c that's 333.33m additional shares, bringing the total to 565m shares on issue. The project NPV is $400m, or 70c a share + various knobs and bobs.

Not greatly oversold based on my 10 minute assessment. You only need the discount rate to be 15% for today's price to look relatively reasonable.
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Good work. Premium for additional sats could be significant, or premium as a potential t/o target.

But excluding those items you're right, it's not massively oversold...but largely depends at what price they raise the 200m.
 
Gringotts Bank said:
lol, yes I do remember that. Let me see if I can find it. The search feature on ASF isn't great.
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Sorry to dig up old dirt but I've found it... it was VLA

https://www.aussiestockforums.com/forums/showthread.php?t=6807&p=636504&viewfull=1#post636504

And a chart for good measure :D

20120706 VLA weekly.JPG
 
Does anyone know if Adrian Ballantyne and Newsat are still a going concern?
It's just that since the announcement months ago that saw the decimation of the share price post the capital raising, it would appear that the company is doing nothing...... No further sales of broadband slots, no nothing. A bit strange considering they were meant to be launching a satellite next year!
Would love to hear something, frankly anything, from the company, just to make sure that Adrian hasn't made all the staff drink coolaid (ala Jonestown), to facilitate meeting the aliens.
Could someone go round and knock on the door???
Please.....
Just in case....
Jewels
 
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