Avanti Communications Share Discussion Threads

[yorgi] 25/2/2011 08:18

Afraid not Argy but I understand the Skoda Yeti is a very good car and if things go well for you then you could always land your helicopter on the roof :-)

[argy2] 25/2/2011 08:13

Do they still make the Reliant Robin?

[greyseal] 25/2/2011 08:12

Whilst it's disappointing that we haven't received a reassuring RNS, I think that we should read that as though the BOD are not concerned about the share price fall as they know that it will recover. They have enough confidence in THEIR company that they do not need to get into a slanging match with analysts. (Just trying to reassure myself)

[johnrxx99] 25/2/2011 07:05

One wonders how long some posters have been in this game. In my experience this par for the course. Markets nervous, people waiting for events and a peice of research that is, to say the least, poor.

Has there been one shread of evidence to suggest anything is wrong with the companies game plan?

I have sold some of my commodities (had too much anyway) and will double up here over the next few days, the period being determined by the volatility and how long it takes to top the Lybian meglomaniac.

When there's blood in the streets, start thinking about new cars.

[dougie471] 25/2/2011 00:33

Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email [e-mail] to buy additional rights or use this link to reference the article -

Financial Times

MARKETS
UK

Breadcrumb trail navigation:

* FT Home
* > Markets
* > Equities
* > UK

Services

* Email briefings & alerts
* RSS feeds
* Portfolio
* Currency converter
* Executive jobs

Small caps: Avanti drops on sell advice

By Bryce Elder

Published: February 24 2011 20:14 | Last updated: February 24 2011 20:14

Avanti Communications dropped 9.5 per cent to 493p after "sell" advice from Investec. The company, which last year launched its first satellite, had also been a target for short sellers in recent days.

"With one satellite in the sky, no active commercial service, much bigger competitors attacking the same markets and more competition to come, we are not convinced Avanti is yet deserving of its £500m market cap," said Investec analyst Morten Singleton.
EDITOR'S CHOICE
Fears of wider civil unrest dent risk appetite - Feb-22
Move to cap sugar price volatility - Feb-22
Milan bourse begins trading after delay - Feb-22
Coffee squeeze set to push price higher - Feb-22
Russia plans Eurobond on back of rising crude - Feb-22
Japan's debt gives investors unlikely opening - Feb-22

Mr Singleton raised doubts about Avanti's definition of a contract backlog, pipeline and projections for demand and pricing. "Management's decision not to answer our key questions and concerns on the investment case does not inspire confidence," he added.

But Cenkos, Avanti's joint house broker, blamed the share price decline on "aggressive promotion of ideas based on misunderstandings" about the company's technology and competitive positioning.

"This provides an excellent buying opportunity for investors as both these positions are wrong and we are confident the shares will rally strongly on the back of inaugural Hylas 1 [satellite] sales next month and on-going contract wins," Cenkos said. We are confident that investors will quadruple their investment over the next two years."

[yorgi] 25/2/2011 00:26

Worth a look, Caledonia Investments.



Also they're Monthly Fact Sheet for January 2011

[yorgi] 25/2/2011 00:15

Yes, I had read that earlier today Malcolmmm someone posted it on here. You may have noticed I commented earlier tonight after having a dig around that to the best of my knowledge none of the major institutional shareholders had been reducing.

I just think the company is under a heavy shorting campaign and there is collusion on it.

[malcolmmm] 25/2/2011 00:06

yorgi, did you read RHPS , part of TB's update on AVN states that one of the biggest holders of Avanti shares is Caledonia Investments, which has an outstanding record of backing successful businesses over the long term. Now if Caledonia started to offload Avanti shares, I might really get concerned. etc
he goes on to say that he is not at all worried

[yorgi] 24/2/2011 23:46

Malcolmmm I'm not suggesting any conspiracy by the company at all I have every confidence in them and trust it is those that are shorting and coming up with these very low valuations that concern me. I don't doubt that AVN have and are being straight and up front.

[malcolmmm] 24/2/2011 23:39

I think that the conspiracy theory is incorrect, Avanti have time after time stated that it is on track to achieve its broker forecasts, if this wasn't the case they would have to report to the market, this imo is a high tech company that is confusing and difficult for most holders to understand making it an easy target for the hedge fund including EK to talk the share price down with conflicting difficult to understand analysis.Also it has sent out the wrong signals in that they refused to speak to shorting hedge funds, director buying of a rather paltry sum and no RNS to calm the market.
Great buying opportunity imo

[yorgi] 24/2/2011 22:51

Yes, I see what you're saying Marksnspakle and I agree they obviously saw both value and a healthy return over a period of time. As you rightly point out there has been progress since then and apart from a slightly later launch date than was originally planned all has gone well.

Only this evening I have begun to think that there has been something bigger afoot behind the scenes to force the share price down and hence AVN.

[superg1] 24/2/2011 22:42

RNS from Avanti. ????

They won't reply to simple emails.

Note The lack I've 'I told you so's', not my style or my interest.

I'd be cautious of averaging down or thinking there will be a bounce. Think of the company of the value it is right now and waht profits it is bringing in now.

There is plenty of time for the likes of SC to turn it north then when the herd returns whip the carpet from under them again leaving them stranded.

Let it settle down and sort itself out, if it is going to be £25 in the future you have plenty of time. Just my opinion of course.

[marksnsparkle] 24/2/2011 22:39

yorgi ... my point is that if institutions saw value back then at around £4.00/£4.30 and nothing has changed and progress has been made then its likely they will see those sort of levels as a strong buying opportunity

So I am putting £4.00/£4.30 forward as a worst case scenario for the downside

Placings prices often act as support

[yorgi] 24/2/2011 22:33

Something like 38% of the shares are held by institutions and to the best of my knowledge they have not been reducing their holdings of recent so it seems to be down to shorting, frightening of PI's and general market fall but as I have just commented I think there could be more to it.

[marksnsparkle] 24/2/2011 22:26

worth mentioning that Avanti previously raised ...

£70 million @ £4.30 (12 July, 2010) ...


and £86 million @ £4.00 (21 December, 2009) ...


There big sums of money to raise from institutional investors at what at the time was a fairly tough funding market

There has been a lot of progress since then and nothing has gone wrong as far as we know ... so a £4.93 valuation today does seem more than a little low ... reality check coming soon?, maybe £4.50/£4.00 might draw a firm support line in the sand?

[blue forever] 24/2/2011 22:22

Of course, a fall in the share price could be quite useful to a potential buyout-ok,I give in,give me 15 quid a share and you can have them all!

[blue forever] 24/2/2011 21:46

I assume Investec and Mr Singleton are on the outside with their noses pressed up against the window pane whereas Cenkos as house brokers should have a much better handle on the situation.
Hmmm-now whom to believe? Criticism by Mr Singleton seems rather perverse-three months ago Avanti didn`t even have a satellite in orbit,now they have the first with 2 and 3 already planned,commercialisation begins in a few weeks, and yes,there are "competitors" but the market is huge and there`s plenty to go around. After all Avanti are not after all the market,just some of it.
If fundamentals are right,value will come out in time.

[tsmith2] 24/2/2011 21:36

FT.com's Small caps: Avanti drops on sell advice
By Bryce Elder

Published: February 24 2011 20:14 | Last updated: February 24 2011 20:14

Avanti Communications dropped 9.5 per cent to 493p after "sell" advice from Investec. The company, which last year launched its first satellite, had also been a target for short sellers in recent days.

"With one satellite in the sky, no active commercial service, much bigger competitors attacking the same markets and more competition to come, we are not convinced Avanti is yet deserving of its £500m market cap," said Investec analyst Morten Singleton.

EDITOR'S CHOICE
Fears of wider civil unrest dent risk appetite - Feb-22.Move to cap sugar price volatility - Feb-22.Milan bourse begins trading after delay - Feb-22.Coffee squeeze set to push price higher - Feb-22.Russia plans Eurobond on back of rising crude - Feb-22.Japan's debt gives investors unlikely opening - Feb-22..Mr Singleton raised doubts about Avanti's definition of a contract backlog, pipeline and projections for demand and pricing. "Management's decision not to answer our key questions and concerns on the investment case does not inspire confidence," he added.

But Cenkos, Avanti's joint house broker, blamed the share price decline on "aggressive promotion of ideas based on misunderstandings" about the company's technology and competitive positioning.

"This provides an excellent buying opportunity for investors as both these positions are wrong and we are confident the shares will rally strongly on the back of inaugural Hylas 1 [satellite] sales next month and on-going contract wins," Cenkos said. We are confident that investors will quadruple their investment over the next two years."
.

[garymott] 24/2/2011 21:12

For Investec Sell comment and Cenkos, joint house broker, comment re. investors quadrupling investment over the next two years:-

[dougie471] 24/2/2011 20:27

the market turmoil the last few days has made it ripe for a bear raid on Avanti. It has been a sea of Red across AIM stocks and this has just helped the raid. AIM stocks are very illiquid and in current market volatility it is stop loss galore for cfd holders and this just causes the falling knife in this type of stock. Fear due to market turmoil holders getting margin calls on other aim stocks and the fear of this not being a safe bet just accelerated the sell off.

in the strong bull market a few weeks ago such a bear raid may not have been so successful.

but you have to look at the facts and read the recent RNS's to realise things are only beginning for this company and it will be like a snowball once we are in service with Haylas one. NOTHING has changed. Read the interim RNS, very very positive and gave a much broader understanding of signed future contracts that hadnt been included in the contract win RNSs.

Key Points

· HYLAS 1 successfully launched and in geostationary orbit

· HYLAS 2 procurement progressing to plan

· Strong demand for Ka band capacity

· Current order book of £229 million at strong average selling prices

· Pipeline of transactions in negotiation for HYLAS 1 and 2 worth £389m

· Good progress made towards efficient financing of HYLAS 3

Financial highlights

· Revenue of £1.2 million (2009: £3.3 million)

· Equity placing in July facilitated the repayment of the HYLAS 1 PIK bond

· Cash balances of £64.9 million (June 2010: £34.2 million)

· $140 million of HYLAS 2 debt drawn

this is all pretty fantastic. As has already been pointed out many times, particularly in the current financial climate when banks are debt collectors, Avanti has been very succuessful in raising capital and equity. The current order book and pipeline of transactions is much more than i would have expected at this stage.

David Williams has every reason to be confident!

[yorgi] 24/2/2011 20:25

If the chart looked awful a few days ago Chrissey it looks a darn site worse today :-(

I agree with the points you make at the beginning about shorters and shorting. Interesting times for sure even if a little painful at present.

[chrissey] 24/2/2011 20:20

I guess the one thing to have in mind is the fact that people who are shorting the stock are not doing so on the basis of it being overvalued, they do so because, without ownership, they can make money when the trade is closed at a lower price.

shorters always advertise what they are doing as the added momentum (using the logic that if enough people think it will drop, they will act accordingly) helps them.

people buying tend to stay quiet until after thay have bought so as to avoid upward momemtum before they act.

at some time, if we have a lot of stock on loan, the trades will have to be closed and value aside (as now) the price will go up.

I'm glad I resisted buying on tuesday, I will buy friday if I can get in at 480-490, it may not be the bottom but as we get closer to the bottom, being able to buy at anywhere close will be too difficult.

I'm also surprised as I would have thought that a lot of people who felt they missed the boat with the rise post launch can now get in at a really good discount and with the launch risk totally removed.

Like I said some days back, the chart looked awful, probably a really good time for the sellers to turn the screw, it got the maximum effect!

[greyseal] 24/2/2011 19:55

No disrespect to tsmith, but can anybody else confirm TW's coments about SC getting the decimal point in the wrong place. Thanks