Can't really see them being a takeover target, for the following reasons:
* Far too expensive at this stage. (by the time you bought NextDC & AJD), The foreign company is far better off building their own centres. Which is what they are doing. Equinix, Global Switch, Digital Reality. AWS is hosted in Equnix but was said to be building 2 of their own DC's in Sydney.
There's no arguing that NextDC isn't riding at a really large premium, sure it's got growth but is that growth fast enough to justify the premium?
Obviously its all about supply and demand
It's easy to say there is a high cost of entry, but we still see a lot of players stumping up that cash. In NSW we have seen lots of supply Global Switch East, EQX 3, Digital Realty, Metronode (govDC's), just to name a few. Also was talk last year of AWS building 2 of their own DC's like I said.
Equinix and others expanding into Melbourne.
Can't just look at NextDC in isolation.
It would of been a completely different story without GlobalSwitch and Equinix's expansions but.
We saw it get to these levels a year ago before falling to $1.80, and the last couple of times we have seen it hit these levels we have seen it fall to ~$2.30. I reckon I would be a keen seller >$2.80 and then just sit on the sideline for a retrace.
NXT Price at posting:
$2.60 Sentiment: Hold Disclosure: Held
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