Avanti Communications Share Discussion Threads

[yorgi] 11/3/2011 08:49

The wider market isn't helping but as Greengiant has commented the management could have done more to have helped the case.

[volvo] 11/3/2011 08:43

Wow when is baby going to turn round.

Took on 7k at 460p just now and feel fairly confident.

Plenty must be cleared out here. Gross drop in 2 months.

[colva] 11/3/2011 07:36

For those that havn,t seen it this is the latest from Tom Bulford.

Thanks to artrader who posted on ii.


'AVANTI COMMUNICATIONS (AVN): On Monday I spoke to Chief Executive David Williams. I must say that he sounded pretty browned off by the amount of wilfully bearish misinformation that has been disseminated about the business.

He began by stressing that no two satellites are the same, rendering any comparisons that have been made in recent weeks as meaningless. In particular, he pointed out that while Eutelsat has a much larger satellite than Avanti, this does not necessarily mean that it will be able to undercut Avanti's pricing. Especially so as half of the cost of running a satellite service is for the earth stations (where the digital traffic of the satellite is passed to and from the terrestrial broadband network). In fact, Williams said that Avanti's pricing is in line with that quoted by Eutelsat in an interview with Sky News.

Williams described a cautious research note by Investec as 'full or errors' and said that anybody who thinks that the waves previously used to transmit the TV signal can be used instead to carry broadband data 'knows nothing.' In his view, Investec's note and subsequent comments from other quarters have been a deliberate attempt to drive down the share price of Avanti for the benefit of short sellers.

Now don't me wrong. I do not dismiss a falling share price lightly and I am not going to carry on supporting Avanti just to keep egg off my face. But negative commentary on Avanti just does not ring true. It simply doesn't square with what Avanti has said and what we know about the data explosion.

I have said in the past that the real threat to Avanti is that it is unable to sell its satellite capacity at the prices that it expects. However Williams pointed out that, at the end of 2009, Avanti was able to raise debt of £194m, at rates below 6% and guaranteed by US and French export credit agencies. This lending decision was made only after a far more thorough analysis of Avanti's technology and business plan than has ever been made by Investec or any other City research house.

He also told me quite categorically that when Avanti reported on February 14th that 'the contract backlog and pipeline give us high confidence that we can achieve the three and five year sell out targets we set ourselves,' it was telling us that it is performing in line with the consensus forecasts of brokers, to which I alluded in the February edition.

One last point to make is that Avanti does not expect its satellites to compete with high-speed fibre optic cable. Because of the distance that the signal must travel it will never be able to do so. However for those who live in remote locations, high-speed cable is simply not an option.

The advantage of satellites is that they can reach spots that others cannot. And they can also carry vast amounts of data at high, if not the very highest speed. And thanks to the data explosion, this transmission capacity is clearly in demand. In short, the story is still very much intact and I see no reason to change my view. BUY UP TO 750p.'

[gorvachof] 11/3/2011 07:28

I agree Greengiant....maybe someone should email David Williams (assuming none has?) and stress peoples annoyance. Seems bad to me that investors on here are only getting secondhand information through T1ps and RHPS, and not direct from the company.

[argy2] 11/3/2011 07:18

One would think with a story so good that the Directors would have lined up several institutional visits etc etc

[greengiant] 11/3/2011 06:27

sg31 / tsmith2, I have absolutely no problem with long term shareholders vs traders position. I am a long term holder. However, I do find it annoying that management have been angered by the misinformation yet have done nothing to set the Investec report right. After all RHPS reports David Williams as "browned off". Commenting on Broker Notes? No, however, there are many examples of companies correcting damaging misinformation.

I do believe in this company and the management however, if someone said something fundamentaly flawed about my company and its prospects, I would want to set the record straight. I would not do this through t1p sheets, I would get the word out to the widest possible audience.. Just my views

gg

[yorgi] 10/3/2011 23:29

That's the icing on the cake :-)

[mark of the rushes] 10/3/2011 23:09

Shanks.."The directors have done better than speak... they've bought into the shares in a very meaningful way"

That´s good enough for me too Shanks and is why I bought into this company for the first time at 5.04 a few days ago.

[yorgi] 10/3/2011 23:00

Market in general has not been too good either. I am looking to see where if I can raise some funds to add as I'm still not convinced by the shorters argument or the rubbish about using old TV transmitters.

[argy2] 10/3/2011 22:48

tsmith2

Let's hope you are right. Unfortunately your track record of late has not been good.

[tsmith2] 10/3/2011 22:28

Can't ever remember a company putting out a RNS commenting on a research note!

Management are answerings raised to them otherwise just concentrating on the day job and showing absolute faith by putting money where their mouths are.

Hopefully some news of contract wins in short order will dispel much of the erroneous nonsense..

[sg31] 10/3/2011 21:47

GG,It depends on whether you are an investor or a speculator.If someone is looking to trade in and out why do the company owe them anything. That person has no real involvement with the company.They could just as well invest in commodities or another company,and they probably do.

The Company has a responsibility to it's staff and it's investors.They will not be affected by short term matters that have occurred recently.If one is holding long term it is the final outcome that is of interest.The share price today or in a week or months time is irrelevant.

If you want to see David Williams true colours see if you can find a copy of his speech just after the successful launch.It was a joyous moment and his true feelings came out.I can't remember his exact words but it was something like....Thank you to all our investors who have stuck by us while we got to this point.Now we can start repaying your faith as the company begins to earn money.The share price will be £25 before we are done.

Not an exact quote but the guy was thinking of his investors at a time like that.

Just trust him

sg31,longterm investor and I have no direct or indirect involvement in the company other than as a shareholder.

[someuwin] 10/3/2011 21:01

Spot on GG. It reflects poorly on management that they will defend their position to paid for subscription sites (t1ps, RHPS) but will not come out in public with a reasoned counter argument to the Investec research note.

Why don't they just put an explanation of the issues involved on the IR page of their website?

Their lack of credible response does not instill confidence.

[geheimnis2] 10/3/2011 20:32

GG

I agree

It is not right to pass priveleged information to (paid for) tipsheets and leave other PIs/IIs in the dark.

[the big fella] 10/3/2011 20:26

Green Giant - excellent post. One that the management should take heed of. It really is that simple.

[greengiant] 10/3/2011 20:24

Shanksaj,

But the uncertainty remains in the Market and why does it remain? Because the management have not addressed the issues raised by investec. This should be simple enough to do.

Don't get me wrong, I believe in this management team and I absolutely believe in the demand for the product. I just think this situation could have been handled diplomatically.

Gg

[par555] 10/3/2011 20:20

greengiant

Well put,agree completely.

If David Williams is prepared to share his take on the situation with Tom Bulford why not issue a press release stating the errors in the Investec / SC arguements and not leave it to RHPS and T1PS to put the arguement for him? Yes the directors have bought shares, what else could they do in the circumstances and not lose credibilty? But that doesn't deal with the technical and sales contract arguements put by Investec/SC IMHO.

[shanksaj] 10/3/2011 19:26

Green giant

The directors have done better than speak... they've bought into the shares in a very meaningful way.

[greengiant] 10/3/2011 19:05

In part, management are responsible for the drop in the share price. The reason I say this is that whilst management can say that they are victims of misinformation and the aggressive short selling and feel aggrieved or even angry about this, you have to ask yourself how and when this information started.

From my simple (and it is simple) point of view, all this hu ha started with the Investec sell recommendation. Management say that this broker note is full of errors and misinformation. This is understandable because management have refused to answer Investec's questions or even publically refute the shortcomings in the Investec report. After all, Investec can only publish a report based on the information they have, if management is not willing to address the major issues raised by the Investec note then they can't then cry foul.

It isn't arrogance that management haven't spoken to the "short sellers" but I cannot understand whether management feel it is in shareholders interests to allow this misinformation to permeate the market. Yes it is one thing to release information through companies like T1ps and RHPS but this is secondary, surely it would be better to tackle this head on? Yes there are confidentiality issues but the main issue seems to be pricing which has been covered by t1ps and rhps.

Am I missing something? Just tired of hearing about conspiracies, if management wanted to clear this up, they could.

gg

[garymott] 10/3/2011 18:54

In Tom Bulford's (of RHPS) email update this evening Tom states he spoke to David Williams on Monday. David told Tom that every satelite is different rendering recent comparisons as 'meaningless' especially as half the operating costs are for earth stations to handle the digital traffic.

David said the Investec research note is 'full of errors' and that anyone who thinks that the airwaves previously used to transmit TV can be used to transmit broadband data 'knows nothing'. David believes the Investec note and 'subsequent comments from other quarters' have been a deliberate attempt to drive down the share price for the benefit of short sellers.

David said that the £194M debt raised at rates less than 6% and guaranteed by US and French export credit agencies was made only after a far more thorough analysis of AVN technology and business plan than has been made by Investec or any other City research house.

David told Tom quite categorically that the contract backlog and pipeline statements made in the AVN results on 14 February meant that AVN is trading in line with the consensus forecasts of brokers.

Tom therefore concludes that the AVN 'story is still very much intact' and consequently reaffirms his 750p buy limit.

Who do you trust; an innumerate Investec analyst (who, by the way, is the only analyst not recommending a Buy) and, probably worse, SC or the US and French export credit agencies that have lent AVN £194M?

[pojscott] 10/3/2011 16:39

Just when I thought it couldn't go any lower!!!

[greengiant] 10/3/2011 15:09

superg1, the issue is you cannot value it oh H1 alone. If you are doing so, you need to include all the contracts signed for H2 and add back the cash balances. The point here is that over the next 12 - 18 months I have no doubt that the share price will be higher than this.

TSmith2 - Glad you are not a day trader, you would have lost a fortune :-)

gg

[superg1] 10/3/2011 14:33

I can't see why you think in service news will make a difference. That is all accepted as a dead cert. As are the contracts connected to Hylas 1.

I seem to remember a price for Hylas 1 of £5.71 fully loaded so why the price surprises people is strange.

I wouldn't hold hopes out for contarct wins and in service as the news that will turn the tide.

Post Director buys there shouldn't be anything significant for weeks

[jimbo55] 10/3/2011 14:07

Long term SBs with guaranteed stops were, from memory, not allowed for AVN on IG Index when Hylas 1 launched, envirovision. I remember somebody commenting about that on this BB.