The share didn't move up because:

1: Intel just make RM50 million in Green Packet is because they are eyeing for development in Wimax technology. They are not investment bank so their investment is not meant for share appreciation in GPacket.
Also, the particular invesetment by Intel doesn't mean GPacket profitability will rise in the future, in fact has not much relationship.

2. Goldman Sachs is heavily disposing its stake in this company recently.

3. GPacket lastest financial result is in red. <--- this is the most influential factor in stock market.

Investment in stock is for future profitability of the company. So generally share will only move if something investment or development that will boost its future profitability.
Until now, the delay of Wimax deployment won't be good news for the company.

Just my 2 cents on the stock market behaviour on how to see from the investment perspective.

Above statement has nothing to do with any recommendation on the company. Judge your own, and buy/sell on your own risk.

This post has been edited by cherroy: May 31 2008, 02:19 PM

A lot of company (especially on technology sector) invest small sum (For Intel to invest 50million is just like individual spending RM50) for technology development in certain company is not because they want to see the 50 millions can grow but to participate and have access and inside of the technology field that could help its core business future development which is their primary objective. May be they want to embedded the Wimax connection in their chip or whatever in the future, only they knew their primary obejctive of it. As Intel is not a investment bank, they are not the one aim for capital appreciation through buying company stake or investment but Goldman Sachs, JPMorgan etc do.

Intel might able to recoup the RM50 million even more through its chips future development related to Wimax later on as from investment in Gpacket experience but not necessary through GPacket. They can merely using Gpacket as their platform of testing or development, doesn't mean they want to recoup and gain through Gpacket. That's the different and market generally view this way.

Their primary concern is not on the 50 million investment return, got return surely good but it is the their primary objective.

Don't mean pessimistic about the Wimax or Gpacket itself but just highlight several challenge on this field based on financial view:

1. High initial capital expenditure (as you mentioned which result company turn into red), which return not yet known. FYI, in accounting standard, spending Rm1 on capital expenditure doesn't mean Rm1 loss. But loss on through depreciation on the capital invested. So company financial turning in red significantly does cause some concern, although not alarming.

2. Gpacket is not the sole Wimax service provider, there are 3 competitors (if not mistaken gov give out 3 Wimax licence). If it is a sole provider then it is good. Then you have to compete with 3 Wimax provider + existing broadband provider like 3G, streamyx.
Also the delay depoloyment of Wimax doesn't do any favour for the company especially financial result already turn into red.

3. Economy of scale is not that big for broadband in Malaysia because of population and average per capital income.
Yes, Malaysia still has low broadband penetration, but you have to consider a lot of lower income group that not afford it if monthly charge of more than RM100 especially kampung folks, sorry no offence. So 20% is not an accurate figure to show potential customers to be tapped because those rural kampung being included in the statistical count.

4. Broadband market might half saturated. Although as mentioned penetration is low at 20% but as said those who want and afford to have broadband, at least have one already. So whether they will take up Wimax with existing broadband like Streamyx still remain a big question, also you have 3G service providers also.

Just some view, doesn't mean Gpacket is not good or have no future. Instead, if the company can penetrate with high take-up rate and being dominat (like Maxis in HP), then its share might have tremendous future. Personally don't view has very good chance because of TM in place, anyway just personal opinion.

There are some serious challenging issues need to overcome mainly from economical of scale for the company to register signficant gain/profit from it. I don't know how much subscribers they need to capture to have a breakeven point, something interesting to find out also. But for sure on pricing side, they will face a lot of challenge.

I do think the main competitor/(obstacle) will come from TM because of monopolise in tele infra-structure.
Streamyx pricing and some 3G price (TM through Celcom) being lowered that can kill a lot of competitor and drive away potential customer as they have the economical scale to do it especially to fence off new telco or broadband providers.

I think it is good that you are aware of risk of it, yup, high risk high gain/loss particular in technology growth stock, no doubt about it. But if for short term speculation (as you said you took a gamble), long term future of the company has not much to do with it but share price short term movement does.

It is important don't try to mix speculation for short term with company long term future. It won't work well most of the time one. Especially on Intel investment in GPacket, don't take this kind of news to justify stock investment, it won't work well, that's why its share hardly move with this kind of news. Instead if it is Goldman Sachs investment in it rather than Intel, then different story.

Cheers.

This post has been edited by cherroy: Jun 1 2008, 07:33 AM

Singapore already issued several 3G license and they are issuing again?

Even so, getting the 3G license doesn't mean profitable as well for the company as competition is intense in this area while until now, lot of telco company are struggling to recoup and breakeven its investment in 3G infrastructure.

Gpacket financial already in red now, further getting 3G license means massive capital expenditure ahead, which further stress the company cashflow and financial situation.

Wimax itself in Malaysia is not yet proven to be profitable.

Actually I a bit doubt on some broadband offered outside of the original telco company, wireless broadband is facing several compeitition, streamyx, 3G, Wimax. While current market is dominated by ADSL (streamyx) and 3G connection, for Wimax to penetrate into them is not easy task, especially not from origin telco company backing.

Broadband business in Malaysia even some other countries are not that lucrative, you need large base of customers which is the most important factor to offset high set up cost for broadband service.

While HP business is a lucrative business.

I might be wrong, feel free to correct me.

No matter how many license one is getting, without turning into a profitability or the business is not profitability, it means nothing.
It just mean high initial capital expenditure only to set up infrastructure if those business is not able to contribute positively especially cashflow, then it is not good for its share price.

Agree during good time, it will fly, but still in actual fact, Wimax profitability still is a doubt, as it is not a sole media or broadband that available in the market which need to compete with others especially 3G is more popular now while being offered by traditional telco company which smaller company that offering Wimax is facing tough competition with them.

In stock market perspective wise, investors are looking for how fast it can balance its book aka turn the Wimax service into a highly profitability business.

There is a research show that they need at least 200K + subscribers to balance their book, currently they managed to sign up around 30K+ under heavy promotion across the countries.

Currently market concern is they are burning cash fast with need lot of initial capital on infrastructure, but profitability wise they need 200K subscribers, which is not easy task.

Basically, stock market care about future profitability of the company and cashflow. Even they are the most successful company in the world to roll over Wimax service but cannot turn the business into highly proftaibility wise, stock market won't like it.
So market will like it if their financial report turning fast and cashflow position improving.

The problem is that I think it is way too optimistic to see subscribers base shoot up from 30K to 200K within this year. If there is no broadband penetration right now, yes, that's for sure achievable. But bulk of people having streamyx and 3G connection currently. So basically they need to convince people to ditch their existing subscription or having a second/another broadband service.

Streamyx has now many subsribers currently? should be around 1 milllion+ after being pioneer in broadband whom tapped the untapped market and with readiness of last miles connection across the countries.

Basically people want affordable, reliable, high speed broadband, be it 3G, streamyx, 4G, 5G etc. Technology wise is only the one dictate how people would like it, it is the aforementioned factors the dictate how people response to it.

Don't mean it is unachievable but not easy task.

1. There are still lot of maintenance cost as well. Profit will only come in if there are large enough subscribers. If a base station cost 5 million, and usable for 5 years, depreciation will eat up the profit of 5 million but it is spreading 1 million each year.
It is the cashflow of 5 million gone.

2. Don't know got this kind of plan, so pardon me on this. But if it is, then positive for Wimax service providers.

3. Mainly because of cashflow issue, if not they won't intend to list it as it just means lesser P1 revenue can be booked into Gpacket financial book as you can't hold possibly more than 75% stake for a listing company.

If P1 is having good future and profitability, I would take directly P1 instead of Gpacket.

My view only.

Actually, Intel invest how much into Wimax, doesn't mean Gpacket prospect must be good (Intel invested in Wimax is a positive to Wimax, but doesn't must directly benefitting Gpacket), as Gpacket doesn't own the patent of the tech nor it is the sole service provider of Wimax Malaysia or worldwide (here got 3 Wimax license has been awarded).

What matter most on Gpacket or P1 is ability to get in number of subscribers.
It is not about high tech or latest tech in stock market, it is about ability to turn the high tech or using the tech to generate $$$ to the company which is the ultimate goal of stock market investors.

There is another worry if YTLE into the market and with the backing of cash rich of YTL group, it could be intense competition in Wimax, not to mention existing other broadband alternative in the market, streamyx, 3G.
So there will be lot of competition around in broadband area, while broadband population ratio could hit saturation point afterwards as number of Malaysia broadband population penetration is not viable for so many broadband providers around.

Not to say Gpacket is bad or good. Just the most important factor that will drive Gpacket or P1 share afterwards is number of its subscribers which enable for them to make profit.

Cheers.

You must either take up the right or sell the right after it list its OR. If not you loss your right and opportunity, which is not a good idea. Not exercising your right or sell your right, means you throw money away only.

Right issue at Rm0.50 which you can buy it at Rm0.50 compared to market price of Rm0.6x, there is no reason why not take up.

You can sell now at RM0.6x and buy it at RM0.50, still free up some cash.

No, today just means ex-right, means today buyer doesn't entitle for the right issue.

You already entitled the right issue and the right (OR) will be commence listing on 3rd Sept (for a week or so), by then you can sell it if you not intend to exercise the right. The right issue exercise dateline should be after 2 weeks time, not now.

The above strike part is wrong. You can let go now still entitle the right issue.

Yes.

Now you have Gpacket and Gpacket-OR (which is going to be listed on 3rd Sept)

Option you have

1. Let go current Gpacket share at RM0.6x now, then exercise the right issue at Rm0.50 afterward

2. Keep the current Gpacket share, but sell the Gpacket-OR after it listed. (probably around worth about 10 cents+ based on current mothershare price)

This post has been edited by cherroy: Aug 28 2009, 03:19 PM

Nobody can know whether it can go back to 80 cents or not or even higher. It depended on overall market condition and individual company issue.

But if you managed to sell the Gpacket-OR after 3rd September (which is given you free one), let say 10 cents, you effective origin cost of the Gpacket share is 0.84-0.10= 0.74

So if Gpacket-OR is traded at RM0.20, and you managed to sell it, then you cost is only 0.64.

This post has been edited by cherroy: Aug 28 2009, 03:35 PM

Yes, affirmative 100.1%.

But Gpacket-OR will only listed from 3rd Sept to 10 Sept, after that it will cease listing. So want to sell must within the 1 week time.

You will have 1400 Gpacket-OR which you can sell, but reconfirm with your OSK broker first so that it is confirmed the OR has been credited into your CDS to avoid potential mistake.

Or

You don't sell the OR but subscribe the right issue at RM0.50 per share or in your case Rm0.50 x 1400 by paying Rm700 which you will be given a new 1400 Gpacket share + free 1400 Gpacket new warrant. (Gpacket-WA which will be listed afterward the right issue exercise completed.)

This is definitely wrong.

Yes and yes, but do check your CDS account before you sell (the OR), just to reconfirm.

CDS account is the account that holds your share,n just like bank saving account. If don't have a clue, just call the broker ask them is there any Gpacket-OR has been credited into your account for you to sell on 3rd. (the account that holds your previous Gpacket share)

1400 -OR worth only will be known after 3rd Sept, after it listed.

This post has been edited by cherroy: Aug 28 2009, 05:20 PM

Yup, Gpacket-OR only will be 'born' on 3rd Sept.

That's why previously I stated to call the broker for reconfirm (it should be there on 3rd, just to reconfirm) if you want to sell it. As if there is some mistake (who knows), selling something you doesn't own is a serious offend in stock market trading.

Yes.

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Added on September 1, 2009, 2:54 pmFor those nominee account (Maybank2U service is nominee type), you won't receive any form, because share name is not under your name. Maybank2U is the one received the form, they will call/inform you for the right issue matter.

This post has been edited by cherroy: Sep 1 2009, 02:54 PM

1 OR is given with 2 share owned before ex-date.

It is always advisable to know the knowledge behind share issue, before start buying. It is not mean to con people but it is just a norm practice out there.

If you sell the OR, you are not entitled for the right issue + free warrant.

OR - is the right/form that enable you to buy the right + free warrant.

You must either subscribe or sell the the OR. As if you don't exercise the OR, then it just means you throw away RM200+ per lot OR you owned.

Bottom line if you see its mothershare will be going up, then subscribe surely gain you more and vice versa. Worth or not worth depended on its mothershare movement afterwards.