optus, newsat court favour, page-3

DMDM - Let me see your tea leaves and raise you some logic.

Ive been thinking about this situation quite a bit and while the anti-NWT sentiment is at a short term high, I think we have real reason to be very optimistic.

Heres my logic:

Newsat publicly announces that it has plans to become a ASX 200 share. I made enquiries with the company as to the expected time frame for this to happen and the response was 2010! I know theres a BIG difference between plans and reality (especially when you look at NWT history), but think about it for just a minute. These are some pretty outlandish claims. Entry in the ASX 200 values NWT at around 3 cents. These comments, although communicated by one man (Adrian Ballentine) are the sum of the collective thoughts of the board. Theres a lot of credibility on the line here for the likes of Richard Green and Lazard. I specify those 2 out because neither were involved with NWT in the past when some of its grand plans didnt come to fruition. I dont believe for a second that Richard Green, who I strongly believe has a lot more influence within the company than any of us seem to think, would allow (in fact sign off) such statements to be made if there wasnt something behind it.
It cant all be NBN. In fact I dont think theyre pinning much hopes on the NBN at all based on my research. Theres likely to be some incidental business but I dont think its the company-making announcement were waiting for. I consider NBN business a bonus
Since joining NWT green has been nothing but forthright and communications from the company have been honest and frequent. Some mock the better than expect results we got last week, but they are almost exactly (although slightly better) in line with the guidance they gave us throughout the quarter, so how can we complain about that? Cant do much better to build credibility in my books.
We know they signed a few million in new deals in January (in addition to recurring revenue) that wasnt included in the results announced last week but that isnt going to get us there. So it must be something else again.
Jabiru, although heavily mocked, will be a big part of the upcoming plans. From what I can gather, theyve done a pretty bad job at explaining the details of the plan and how the mechanics of the monetization will work, but its an absolute cash cow for Newsat if it goes ahead in its planned form. I expect better information to shareholders on that in the future.
New directors are due this quarter from memory. We have no reason to expect they wont be announced soon based on recent form and despite complaints they havent been announced yet, weve had no reason to expect them before this time based on what weve been told. Any new director would have done their due diligence on the company, and would know the companies plans and recent statements, including the ASX 200 plan. If it there was no realistic chance of meeting that goal I would expect immense difficulty in getting any credible director to sign up. If we get someone credible that will reaffirm the likihood of the goals viability. Not many people would sign to a job just to be set up for failure and to look like an idiot and to publically disgrace themselves.
Since the Jabiru plan is some way off, and although I expect a good increase if the market factors in some future profits based on pre-sales years before implementation, theres a gap in all that coming off and 3 cents.
AB was given a lifeline earlier this year. He has convinced very wise heads that hes worth keeping around. How? The result of my cumulative logic is therefore that there MUST be big deals in the pipelines of significant value to plug the gap in the above and 3 cents. I share the frustration that we are got diluted again, but I really think that we have to judge the current position with new eyes. The company has been worth a lot more in the past, but it has never been in a better position than it is now. Its business is barely reconcilable with a few years ago. Its not something Id care to put a time on but its palpable.
These are my views based on my own research and logic. We all know some others have conflicting views. To me, based on the circumstances above, on the balance of probabilities I think we will see an explosion in the Newsat share price in coming months with limited downside. I should declare Im at the pointy end of the top 20, but I dont ask anyone to invest in NWT, Im just laying out some thoughts. At the end of the day the news and results are the only thing that will mean anything. Watch this space...