Telit Communications Share Discussion Threads

[savagedstock] 17/10/2017 09:03

troublingtimes - thanks. what i was getting at is that sierra makes 30 million usd profit a year in pretty much the same industry....TCM loses money. i do not disagree with valuations etc, but if was a PE company I know which I would buy...

[verulamium] 17/10/2017 08:13

Well if everyone who's short has had this and has to close by the end of the day, then it'll be a very blue day:

"....We have been informed by our brokers that we will no longer be able to borrow the stock and due to you being short on the position, we will have to close it...."

Though long term, the person/institution lending the stock could only want it back to sell themselves.

[troublingtimes] 16/10/2017 18:15

So TW is earning the shorter's schilling again!

Ennismore must be getting worried if they are yanking his chain!

[troublingtimes] 16/10/2017 17:30

savage - US tech companies do trade on much better multiples than UK tech. The US market is definitely more willing to pay for "blue sky". They also seem to be able to raise huge amounts of money on pretty much thin air!

You could so a good trade of take this company and then re-inject into a US or Chinese company and take the make up!

[savagedstock] 16/10/2017 14:47

Interesting and thanks....the Telit Platform is a glorified billing platform. It managed the data usage of each chip and spits out a bill. As platforms go, it is unwieldy and unfriendly, and at times wrong....needs substantial investment to bring it to what VOD or O2 would use imo

[owenski] 16/10/2017 14:29

Interesting

I take the management speak with a pinch of salt.

As I see it, they need to raise funds, if they do it in the open market they will be hammered, so they're selling off some of the silver to raise funds. The Auto side is an attractive business so likely to attract buyers, this will raise funds for TCM and reduce their ongoing cost base, but they get to keep their commercial side where they are still engaged with ongoing trial projects - expected to convert at some point into orders - and, they still keep the high growth Telit Platform service - the part that manages the data.

Wonder if Oozi's behind the scenes making phone calls.

Could be a good deal and if they are funded, might start forcing short positions to close. IMO

[verulamium] 16/10/2017 14:18

Thanks frazboy. The subscription part looks like it would be part of Telit "Services", which is most definitely not non-core and the part that they like to trumpet is growing so quickly - but obviously no one would want to buy the part that just involves making the boxes, and certainly wouldn't pay anything like $100M for it.

Releasing fake news as a press rumour then issuing an RNS correcting the fake news whilst making it look as if you're confirming it isn't great behaviour. Not for a second suggesting that this is what they've done of course.

[frazboy] 16/10/2017 14:05

Verulamium - these are perhaps the most relevant annoucements



The ATOP acquisition which was the "catalyst" for the creation of the automotive business was acquired early in 2014. See here:



The cost of this acquisition looks to have been a few million dollars. What it's worth now is anyone's guess but $100m (or £100m?) looks forthy. However, perhaps this is one element of the business that can create reoccuring revevnues... Once IoT technology (a cellular communications chip) is embedded in a car then perhaps the onwner has to pay a subscription service to continue to receive mapping updates, and live information etc?

[savagedstock] 16/10/2017 14:04

like you i have looked for this as well, and cannot find it. So a non-descript, non-core business is really worth half the company....really? i mean really?? Let's just suppose it is true, then you have either 1) a substantial re-rating of retained assets, or 2) cash used to plug a finance hole that doesn't dilute management. If 1) is true, then this should be a no brainer for a take-out, and at a substantial premium. More interested in the endless announcements regarding their chip sets, and their compatibility with larger companies. A this is not unique to TCM B. some of the technology does not work properly, particularly the 2G.....companies like Sierra Wireless etc are stronger in terms of technical capability

[verulamium] 16/10/2017 13:28

Any of the long term holders have a clue about what the "automotive subsidiary" would include? There's no company structure on their website that I can find. There was Telit Automotive Solutions formed 3 years ago, but it wouldn't seem to fit into the non-core area that the RNS talks about.

Their whole website reminds me rather of RCG's one years ago, even down to the staff photo outside the office (in RCG's case, it turned out to be someone else's office with a RCG sign planted in front of it)

[verulamium] 16/10/2017 13:08

...so they've managed to release a rumour that this "automotive subsidiary" is worth $100M+, then release an RNS saying it's non core and no use to them going forward. You've got to hand it to them. Looks like Oozi's old ways haven't stopped with his departure.

[verulamium] 16/10/2017 12:56

Savagedstock - they just have made an announcement.

[savagedstock] 16/10/2017 12:55

i agree with the view that the nomad should force the company to make an announcement. the question is will they? or will we get the usual 'the company is unaware of any reasons for the price move' routine....as to who is selling, it feels quite gappy so it could well be the MM are being taken short....natural buyers in a cash call.

what is the price of borrow on this now....likely to be around 30% or higher. So 13.3% shorts likely to be shorting at higher levels to average up, and take advantage of the cash raise.

Problem is even if they get £100M for this division, given the rate of cashburn how long will it last. More importantly still no news on Independent Directors, company strategy etc...and of course the previous ceo stake....

[verulamium] 16/10/2017 12:53

What do they mean by the "automotive subsidiary"? After the split between Products, Services and Consultancy I don't recall seeing figures for separate parts of Products. Are they actually talking about a sale of the whole of the Products division, or shoving any products that move above a certain speed into an automotive part? But then, wouldn't the automotive part include some of Services as well? I'm stumped. Perhaps that's the idea.

[mister md] 16/10/2017 12:38

So we know who is buying. Interesting to see who is selling ...

[troublingtimes] 16/10/2017 12:32

What I want to know is if the company has appointed Rothschild to sell a big part of it why has the company not announced this? Why is it just being whisper into the market by the FT?

Surely the nomad needs to get the company to make a announcement?

[frazboy] 16/10/2017 12:19

Bid chatter prior to a fund raise?

Beer money short still on, but there are too many sharks in this water to dip more than a toe.

[twistednik] 16/10/2017 11:23

Bounce on bid chatter for auto subsidiary...

--------------------------

Telit Communications [LON:TCM], the UK-based microchip developer, is weighing interest in a sale of its automotive subsidiary, the Financial Times reported. Two sources briefed on the situation said the unit is priced at GBP 100m-150m (USD 132m-198m). Another individual said the process, under adviser Rothschild, is in the early stages and far from any deal, the item reported.

Advent International, Apax Partners, Battery Ventures, Berkshire Partners and Vector Capital are among PE firms said to have links to the situation, although no offers have been received, the report said. A number of potential trade bidders have also been approached, the item reported.

Telit’s share price has plummeted since a scandal involving former chief executive Oozi Cats, who stepped down two months ago, which leaves the business vulnerable to takeover bids, the report said.

Since Cats’ exit, the Hong Kong fund Run Liang Tai Management has been accumulating a stake in excess of 14% in Telit, which has an approximately GBP 205m market cap, the item noted.

[owenski] 16/10/2017 10:06

Shorts remain at 13.3%

Interesting to see how this plays out. Could be someone ends up with a decent business on the cheap.

[troublingtimes] 16/10/2017 09:57

May only be technical but I see the shorters are drifting off slowly

[master rsi] 16/10/2017 08:55

170.125p + 12.125p

Telit attracts private equity interest

Potential bidders are circling UK tech company Telit Communications, with private equity buyers weighing up making offers for a large part of the business as a mystery Chinese investor continues to build a stake.

FT ..

[troublingtimes] 13/10/2017 19:20

Seems the possibility of a bid by the Chinese is getting attention in Asia:

This is from a publication called "Asia Flash" out this week:

Speculation that Run Liang Tai will make a bid is interesting as if it is firmed up it would, the Asia Flash believes, be only the second definitive bid by a Chinese entity for a UK-listed stock since 2012 when Chengdu Geeya Technology (Geeya, 300028 CH) acquired set-top box manufacturer Harvard International and Chinese SOE China General Nuclear Power Group (CGNPC) acquired uranium mining company Kalahari Minerals.

The recent and ongoing definitively agreed sale of Imagination Technologies (LON:IMG) to Chinese state-backed, but US based, Canyon Bridge is the first since those two deals. Back in October 2016, the Asia Flash flagged Imagination Tech as one of several UK listed companies that could be subject to a Chinese bid.

[glenkaz] 13/10/2017 17:27

Hey might come back for a bit soon 🗣💩 bad breath 😷 still hear then! Complete c/nt! 🤡🖕