It's a pity the thread got so far off topic but TPM has had a very powerful past 4 days and i have opened another short at 9.42. Yr end not far away and claerly mkt expects big things from the iiNet TO but at 30x earnings its too expensive in my estimation. I see the Aussie telco mkt as saturated. Those that have mkt share make good ROE but the massive 97fold rise in TPM has largely be due to gaining customer numbers. Yes, outsourcing call centres to Philippines has cut costs but big gains come from increase in new customers.
So question is:
a) Has TPG paid too much for the iiNet customers?
b) Does TPG have pricing power i.e. can it push up cost of adsl, calls etc?
c) Can TPG continue to gain new customers from likes of TLS who have been asleep at the wheel for yrs.
If its YES to all 3 then TPG SP will rise and possibly significantly. But i have doubts whether company can maintain prev rates of growth.
PS. Very interesting social media stuff re staff morale at iiNet since TPG took over just days ago. Claerly the companies have a different culture.
SP now 9.46 so already down a few bob. dyor.
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