NextDC: undervalued, page-84

Google, Amazon, Microsoft reported results and all appear to be down in the After Hours trade. That added with the recent poor sentiment across NASDAQ / Tech / Growth.

Originally posted by HandsomeDave ↑

Originally posted by simm0
There was a reported jump from 37% to 70% utilisation for P1 lately (according to the above businessnews article) so best not be caught out being full. There must be some big order(s) on their way. Also, the Vocus ASC Cable has recently come online plus the Indigo West / Central cables are not too far away either (Q1 2019) so not as isolated as has been in the past.

Yeah thats fair enough, but at the moment when I look at the amount of capacity either online or coming online in WA I am concerned about the size of P2.

A simple google search turns up

PierDC - Uptime Certified, 8MW available
Equinix announced the expansion of the Metronode site
Datacenter Limited, a 6MW site and a customer of Data Exchange
FrontierDC are constructing a facility in Perth based on their announcements

And you still have all the older Vocus facilities floating about that they could not clear off their balance sheet when the sale of their data centre assets never eventuated.

I think its going to be really tough going in that state for a while given the state of the local economy too. I appreciate that there is some significant investment in new submarine cables Im just curious to know where all the demand is coming from.

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Well fortunately CS would know the demand that warrants investing a couple of hundred million into P2 especially given how long P1 is taking to fill. I’m pretty confident that he won’t make the same mistake twice. Meaning if they are building it, they will fill it. Gltah

Now isn't the time for trust.

• Especially in a market that has already performed poorly.
• Investors are right to have legitimate concerns around Return on Capital.
• Taking on debt to fund it. At a time of increasing interest rates & higher market volatility.
• Moving forward with P2, when P1 isn't even close to being fully utilised.
• Failure to communicate on the situation with P1, and a failure to communicate why P2 at this time represents good use of Capital Allocation.

Personally I do question a bit about where managements head has been at:

• Wasting resources in the fight with APDC.
• Moving forward with a large P2, when P1 isn't even close to being fully utilised.
• Timing and sizing around M2, M3, S2, S3. S2 was late and now they are onto talking about/investing resources into M3/S3 before they have even finished S2. Given how late S2 was, it would have been good to see them target a larger scale.
• Sydney/Melbourne should have been dominating their focus.

I do wonder what will happen to short-term sentiment after the half yearly if there isn't a substantial change in utilisation for M2? B2 looks to be a lot more active, but it carries less weight than M2.