...on the other hand

Well hasn't it been an exciting couple of days on the QFX board. I thought I'd let it quiet down a little here before I weighed in on the recent news that HBO has sold their 'strategic investment' for 1/10th of its face value. Any ideas why HBO were so keen to sell if the future was so bright?

Let me start by saying congratulations to any holders who picked up parcels at or below the 1c mark and sold during yesterday's liquidity event. Clearly a fantastic opportunity to realise profit. Despite my bearish position on this business and its management I honestly hope ALL QFX holders make money from their investment.

I'll also admit: I did not see this coming. As I have stated previously I do not see anyone taking over this company (at least as the result of buying out holders at 10c!!!), and despite Monday this position has not changed. That said, I don't think anyone anticipated HBO selling their preference shares for such a bargain basement price. Indeed, if any of you did, you have a better insight into this business than management as they were clearly caught with their pants down when the AFR published in the early hours of Monday morning!!

Pretty impressive trading Monday and it would have been a great ride for holders to see the price touch 1.6c! Reality appears to be setting in a little today, pushing the price back down to the a bit under the levels hit 2 weeks ago. Still, better to be above 1c than below.

So what does it all mean? Well clearly the initial reaction from the market was "Nine is going to take over". I'm not as sure.

Clearly this does remove the 'poison pill' of NEC needing to pay HBO $10m, in addition to any amount they would need to pay to non-preference holders. That's good! On the other hand, you can forget about NEC giving up these shares to any competing suitors for anything less than face value. $1m may just have procured NEC a insurance policy against anyone else swooping in and picking up the platform. Almost a no-brainer.. either they block a competitor or make 10-bagger.

Alternatively, NEC could choose to sit on their new stake until the end of the year when QFX will probably need to raise capital again. If cash flow positive was no closer, competition was rising, and Nine hadn't made any clear intentions, it might prove to be a difficult matter tap the market for more money. What happens if the business can no longer raise capital? They go into liquidation and Nine gets to pick over the bones, well ahead of any holders on the board.

Another important question, "what does this mean for HBO content"?. That vital HBO content... Might be too make a prediction on this, but even holders have to admit it was much more comforting having HBO on the registry than off it.

I'll tell you one thing, bloody entertaining watching this business! I look forward to seeing where it finishes up. Very few small caps I follow issue as many announcements regarding 'statements in the media'!!

Good luck to all posters (holders or not!)