Could Channel 7 possibly go bust ?, page-19

Hope indeed, I am a long term shareholder now well under water having seen my WA newspaper shares taken over by 7 many years ago.

I will not sell but wait it out at this point. SWM is seriously undervalued but the market pricing is reflective of the debt and future prospects for revenue to erode that and opinions around their ability to maintain a business model that is ruined by internet reality.

I do worry however that the next few years will likely see lower consumption, lower prosperity and very hard times for free to air TV to make a buck. Asset sales can and will erode much of the debt but the structure of 7 will change.

For shareholders, like myself, it is increasingly possible for SWM debt to transfer to private equity, which will massively dilute holders. Reconstruction of capital will also likely happen which will reduce number of shares on offer. Maybe 1:50 followed by a rights issue to yet further reduce debt.

But we just don’t know what will happen. You either sell and move on, hold like myself and go with the flow of change or buy with gusto and maybe come out in front.

Again, for me I will hold and see more dust settling on our economy and likely timeframe for a recession to pass. And yes I might have missed great profits by not buying in at 6 cents, but sensibly an investor must have clearer views on the future than now. By next reporting in August and hopefully post Covid 19 we will see a clearer path for this Company, like so many others