SKT (ASX) Ann: Change in substantial holding

Originally posted by mistaTea: ↑

I still find myself firing a few posts on Sharetrader. I find most of the 'discussions' on that platform useless though to be fair - certainly when it comes to Sky. You get the odd reasonable/thoughtful musing - but mostly it seems to be posts from Sky-haters who simply say "Sky is shit. I hate Sky. They will fail, good riddance". No real rationale or thoughtful consideration into how Sky might tackle their challenges etc.

Not sure why I bother posting on there anymore for Sky really - I must be a sucker for punishment. Or perhaps it amuses me.

Anyhow, one poster was asking if anyone knew how RugyPass was doing given Sky did fork out a chunk of dosh to acquire the platform.

I shared some thoughts, which I figured I would publish here for those that may be interested in more ramblings from MistaTea. I PITY THE FOOL.

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Not sure what their exact sub numbers were since Sky do not break them out separately.

However it would be fair to say that their subs will have taken a big hit due to COVID since they only stream rugby... and there is zero live rugby at the moment. Not sure if RugbyPass have offered their service free for the next 3 months like Spark Sport.

RugbyPass was a long-term play. 2020 is going to be an absolute write-off for the service I think, but if things get back to normal from 2021 there is no reason to believe RugbyPass cannot still be a success.

Half of that $62M was paid with shares...shares that are now worth about a quarter of what they were when the deal was done. So, that $31-odd million worth of shares issued are now only worth about $7M. I imagine RugbyPass are very motivated to turn things around ASAP to help lift the quoted price of their shares.

In my opinion, it does highlight how crazy things have gotten though. At one point Sky was valued as having a Market Cap of about $80M only. Even if they overpaid for RugbyPass... let's say for arguments sake RugbyPass was only actually worth half what they paid - $30M given where it is now in terms of subs. Forget the hype about the large upside etc...

Well, when the Market Cap of Sky was $80M that would imply that Sky TV's entire NZ operation is only actually worth $50M. I think that is absurd. If $62M was a fair value for RP the it would mean the rest of Sky was only worth $18M!!

I just took a peek at the current Market Cap = $118M. Using the same argument as above ('real' value of RP = $30M), the Market is effectively saying that Sky TV's NZ operation is only worth $88M. I think that is nuts when you consider the quantity and value of rights held from 2021, a satellite base with over half a million customers, and growing NZ-based streaming platforms - which now includes the popular Lightbox.

Do I think a rational owner would sell Sky TV's NZ operations for only $88M? Nope. Realistically, I think a rational owner would expect at least 5 times that for the NZ operations. Plus a 'fair value' for RugbyPass.

And of course it goes without saying - in my view the world would be a much more orderly place if everyone just saw things my way!

Expand

I too keep an eye on the sharetrader platform - but I have to agree, there's little critical thought in the posts beyond yours @mistaTea.

I know this must be a complex time for the company but I wonder if they should be giving more frequent updates on the situation in light of the lock down. Subscription movements, negotiations with rights holders. That would certainly be useful to shareholders.

I guess on the other hand they maybe disillusioned with the share price movement and are less motivated to keep a mispriced market completely informed beyond their statutory obligations.
Strange times

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Price($)	Vol.	No.
2.680	333	1
2.690	1291	1
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333

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(20min delay)
Last $2.66		Change 0.040(1.53%)		Mkt cap ! $366.2M

Open	High	Low	Value	Volume
$2.56	$2.66	$2.56	$49.96K	18.99K

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