No I am bearish on Telstra and tempted to short it.
Venture capital is a highly competitive industry and not so simple as throwing seeds all over the place hoping for a home run.
If you were an entrepreneur, you have to the choice of Sequoia, A16Z, benchmark, Kleiner Perkins, Accel...they are all connected firms in the valley. Just because Telstra venture might pay you slightly better terms is not how it works.
This is what Telstra is doing to offset a declining business. Hoping for a home run because there is no way out.
Here TPM is slowing eating away at Telstra. Telstra's starting point is higher but make no mistake it's declining.
Telstra out in the countryside still enjoy a monopoly and that is the only strong business...for now.
It's my opinion of course.
Telstra can't compete with ASP of $30 for mobile, VC wont work, there is no differentiation with NBN, Foxtel/content as a strategy is not flawed but...isn't Foxtel's strength Sports? study NBA for example...The people creating the content have the pricing power. Foxtel wont be able to compete with Amazon Prime. So this content strategy while not flawed is incredibly tough.
Oh and debt is high.
TPM Price at posting:
$5.42 Sentiment: Buy Disclosure: Held
