Jump to content

VDTH - Videocon

oplia

By oplia
in Investment Ideas

 Share

Recommended Posts

  • 2 weeks later...
  • Replies 159
  • Created
  • Last Reply

Top Posters In This Topic

Popular Days

Top Posters In This Topic

Popular Days

Foreign Tuffett Newbie

Foreign Tuffett

Posted
Posted

Anyone still own and/or watching this? Down big today after Dish TV India had a poor quarter.

 

Down even bigger today.

 

I sold a few months ago so not really following anymore.

 

Bagholder reporting in  :P

 

Sir yes sir, another bagholder reporting for duty!

 

My take is that the demonetization in late 2016 is still hurting results. Subscriber #s are still going up, which is good.

 

Videocon reports on Monday night. Presumably its results will be poor as well. 

 

I am actually considering increasing my position, as the thesis remains intact: there's a massive long term tailwind behind pay TV in India. The combined Dish-Videocon entity will be the Harambe (800 pound gorilla) in this market. 

Link to comment
Share on other sites
  • 2 weeks later...
flesh Newbie

flesh

Posted
Posted

I'm trying to figure out why this isn't a massive long. Let me know. Currently have a small position. This is all from memory so +- 15% lol

 

1. I don't think I've ever seen so many synergies

-content

-pre merger distribution center's vdth 2k dish india 1200, easily the most distribution centers of any competitor, no one is close

-back office

-route density for install/repair

-consolidation adding pricing power

-widest serviceable footprint

-most content

-most options

-sg&a/back office

 

2. Young growing population, households growing faster due to middle income growth, tv households growing faster than that, super high gdp growth.

 

3. Massive operating leverage, incremental adds from here at double current margins ish before synergies.

 

4. Timing is perfect with monetization issues, head wind now, tail wind in future by providing more reliable/convenient payment methods from both the customer and company perspective.

 

5. Currently fairly valued before synergies for a compounder with a long runway.

 

6. Current pricing must double before netflix is at price parity however content will still be at severe disparity

 

7. Horrid infrastructure in terms of cable to home or fiber. Years/decades before dish is seriously limited by multi-plays from cable. By then, cell internet speeds/bandwidth are so fast, it's less of an issue.

 

There's risks related to india and the future listing in pounds but the pounds been hammered and india is seeking reform and has plenty of roadmaps to copy.

 

 

 

 

Link to comment
Share on other sites
  • 1 month later...
Foreign Tuffett Newbie

Foreign Tuffett

Posted
Posted

I'm trying to figure out why this isn't a massive long. Let me know. Currently have a small position. This is all from memory so +- 15% lol

 

1. I don't think I've ever seen so many synergies

-content

-pre merger distribution center's vdth 2k dish india 1200, easily the most distribution centers of any competitor, no one is close

-back office

-route density for install/repair

-consolidation adding pricing power

-widest serviceable footprint

-most content

-most options

-sg&a/back office

 

2. Young growing population, households growing faster due to middle income growth, tv households growing faster than that, super high gdp growth.

 

3. Massive operating leverage, incremental adds from here at double current margins ish before synergies.

 

4. Timing is perfect with monetization issues, head wind now, tail wind in future by providing more reliable/convenient payment methods from both the customer and company perspective.

 

5. Currently fairly valued before synergies for a compounder with a long runway.

 

6. Current pricing must double before netflix is at price parity however content will still be at severe disparity

 

7. Horrid infrastructure in terms of cable to home or fiber. Years/decades before dish is seriously limited by multi-plays from cable. By then, cell internet speeds/bandwidth are so fast, it's less of an issue.

 

There's risks related to india and the future listing in pounds but the pounds been hammered and india is seeking reform and has plenty of roadmaps to copy.

 

I agree with basically all your points. I think that demonetization and upcoming tax reforms will prove to be temporary headwinds. Over time I expect them to turn into tailwinds for the post-transaction entity, as well as for the Indian economy in general. 

 

I think another thing been holding back the share price is uncertainty about what exchange VDTH shareholders will own shares of the post-transaction entity on. The original plan was for a Luxembourg GDR, then they pivoted (I think?) to    claiming that there would also be a US-listed ADR, and then they pivoted again to the current plan to have a London listed GDR.

 

I think this uncertainty, as well as this being a situation in which there will no longer be a US listing, it is temporarily limiting the appeal to investors.

Link to comment
Share on other sites
_JJ_ Newbie

_JJ_

Posted
Posted

I'm trying to figure out why this isn't a massive long. Let me know. Currently have a small position. This is all from memory so +- 15% lol

 

1. I don't think I've ever seen so many synergies

-content

-pre merger distribution center's vdth 2k dish india 1200, easily the most distribution centers of any competitor, no one is close

-back office

-route density for install/repair

-consolidation adding pricing power

-widest serviceable footprint

-most content

-most options

-sg&a/back office

 

2. Young growing population, households growing faster due to middle income growth, tv households growing faster than that, super high gdp growth.

 

3. Massive operating leverage, incremental adds from here at double current margins ish before synergies.

 

4. Timing is perfect with monetization issues, head wind now, tail wind in future by providing more reliable/convenient payment methods from both the customer and company perspective.

 

5. Currently fairly valued before synergies for a compounder with a long runway.

 

6. Current pricing must double before netflix is at price parity however content will still be at severe disparity

 

7. Horrid infrastructure in terms of cable to home or fiber. Years/decades before dish is seriously limited by multi-plays from cable. By then, cell internet speeds/bandwidth are so fast, it's less of an issue.

 

There's risks related to india and the future listing in pounds but the pounds been hammered and india is seeking reform and has plenty of roadmaps to copy.

 

I agree with basically all your points. I think that demonetization and upcoming tax reforms will prove to be temporary headwinds. Over time I expect them to turn into tailwinds for the post-transaction entity, as well as for the Indian economy in general. 

 

I think another thing been holding back the share price is uncertainty about what exchange VDTH shareholders will own shares of the post-transaction entity on. The original plan was for a Luxembourg GDR, then they pivoted (I think?) to    claiming that there would also be a US-listed ADR, and then they pivoted again to the current plan to have a London listed GDR.

 

I think this uncertainty, as well as this being a situation in which there will no longer be a US listing, it is temporarily limiting the appeal to investors.

 

There's not really uncertainty about the listing of the GDR. In the Q4 conference call Dhoot said:

 

"An important update is also that we have signed an amendment with the previous scheme of amalgamation; this is to change the GDR listing from Luxembourg to the London Stock exchange."

 

The spread is down to only 2.5%. I initially entered as a merger arbitrage, but ended up holding because of Dish TV India's depressed share price and post-merger synergies.

Link to comment
Share on other sites
  • 1 month later...
misterkrusty Newbie

misterkrusty

Posted
Posted

mountboney-  your math is right.  FYI, the spread has been all over the place since deal was announced, from nearly 0% to high-teens (at least).

 

as to why - the usual reasons are out.  at this point the only approval they still need is from the MIB, and I don't think anyone doubts they'll get it.  financing is not an issue since it's an all stock merger.

 

I think the reason for the high spread (assuming oct 1 close, 8.5% is pretty high) is inability to hedge by risk arbs.  very tough if not impossible to short the Dish TV GDR ... that was set up to give Apollo a way to exit their investment many years ago and not really designed for normal trading.  Also, many funds do not have access to the Indian exchanges.  You need to be >$100m AUM and get all sorts of govt approvals.

Link to comment
Share on other sites
  • 4 months later...
writser Newbie

writser

Posted
Posted

I own a few shares. What I don't understand: this news was already out yesterday before the US open (link to zip file with PDF of letter to the Bombay Stock exchange) and VDTH hardly moved. I tried to sell my shares but was maybe probably not aggressive enough. Today Dish India stock is down ~7%, which is not super surprising imho, but there is no more news as far as I know yet VDTH suddenly craters over 15% .. I'm probably missing something but I bought a few extra shares.

Link to comment
Share on other sites
misterkrusty Newbie

misterkrusty

Posted
Posted

yes it's weird.  IR tells me that retail investors comprise a very tiny % of shares outstanding, so you'd think that professional investors would have gotten the news yesterday.

 

just one more frustration in this investment tale of woe.

 

If the Dhoots have pledged only a very small number of shares as collateral on their loans (outside of VDTH), the only problem I can imagine here is that one or more of them provided a personal guarantee on a loan(s) with recourse to basically everything they own, including VDTH shares.  Thoughts?

Link to comment
Share on other sites
  • 4 weeks later...
writser Newbie

writser

Posted
Posted

I have nothing sensible to say about that. I thought it would be reasonably easy to pass the vote but I was completely mistaken. I feel it is now very hard (at least for me) to judge chances of deal passing now that the vote failed the first time. The record date was 27 December or something, how many people do you think owned shares last year, didn't vote at first but will do so now? How close was the vote the first time? I have no clue .. Some clown on twitter is saying he owns a few percent and is arguing for a 100% extra consideration for equity holders (and would rather go down with the ship otherwise). Doesn't look like a very smart strategy to me - I don't see why Genoptix would feel compelled to cave in when they can buy the intellectual property on the cheap in a bankruptcy. Also, the cash payout to equity holders is highly levered (for lack of a better word): if the deal takes a few weeks longer to complete and the company burns through a million or so in extra cash then that would be ~16ct per share less.

 

The upside is probably there but there is certainly a big downside. I still own a few shares but mostly for popcorn value. Too hard to judge for me and I'm a big pussy who hates losing money.

Link to comment
Share on other sites
  • 1 month later...
  • 3 weeks later...
misterkrusty Newbie

misterkrusty

Posted
Posted

I do see the new GDR sitting in both Schwab and IBKR accounts that I manage.  Haven't tried to trade it yet. 

 

According to the London Stock Exch, there has been decent volume over the past couple days, but almost all of that was in 3 SI (Systematic Internaliser) trades ... I'm not too familiar with this sort of stuff.  As far as I can tell, these were trades made by a large brokerage that arranged the trades between its own clients.  Sounds like block trades where the parties negotiated the price, but I'm not sure.

 

This is the first time I've watched the trading action in a newly listed GDR, so not sure what to make of all this.

 

Link to comment
Share on other sites
hillfronter83 Newbie

hillfronter83

Posted
Posted

I do see the new GDR sitting in both Schwab and IBKR accounts that I manage.  Haven't tried to trade it yet. 

 

According to the London Stock Exch, there has been decent volume over the past couple days, but almost all of that was in 3 SI (Systematic Internaliser) trades ... I'm not too familiar with this sort of stuff.  As far as I can tell, these were trades made by a large brokerage that arranged the trades between its own clients.  Sounds like block trades where the parties negotiated the price, but I'm not sure.

 

This is the first time I've watched the trading action in a newly listed GDR, so not sure what to make of all this.

 

Was anyone able to sell new GDR shares?

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share
Go to topic listing


×
×
  • Create New...