Is this share likely increase in next 6th months...any guesses as to what? Is it in trouble? Thanks
Jet, why i believe the answer is yes. Firstly R360 million of CellC loss was due to forex. Now you could argue that the rand declined against the dollar and yes that affects companies that does not do hedging (buying currency upfront at an agreed rate). The Levy brothers helped to reduce the R1 Billion anticipated loss by R 400 million to R600 Million. So, let's say they improve it with only another R 300 million and have R 300 million less currency losses CellC would be profitable by maybe as soon as Feb next year.
They rolled out fibre to 16000 houses in one year. Massive uncap demand for data - fibre is mostly subscription based and uncapped data, so the price of data does not matter then.
They enlisted 64 mobile virtual network operators including FNB that is quoted below that Telkom and CellC should merge. Funny how this guy from FNB is questioning FNBs strategy to become a MVNO (by implication).
You cannot compare them to MTN, Telkom and Vodacom as theirs are different strategies.
Fact is the commodity (airtime and data) they sell is not tangible or manufactured in a factory. It is measured by the time and capacity of using technology infrastructure. They have an infrastructure agreement with MTN and with 2 internet service providers. So, all this talk about CellC that will actually just be fine.
Now, lets look at BLU before CellC. BLU share price was more than R20 a share. That business is still as solid as it was and the massive capex spent on infrastructure in Mexico and India is almost paid off.
If you take a 50% discount for doubt and investor jittery (lack of understanding tech) then R9-10 a share is not unrealistic.
I always like to see if the execs believe in their own company, so I look at the SENSE and see if they personally buy their own company shares. They are.