Author Topic: VDTH - Videocon  (Read 35759 times)

flesh

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Re: VDTH - Videocon
« Reply #130 on: June 06, 2017, 01:42:05 PM »
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.





Foreign Tuffett

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Re: VDTH - Videocon
« Reply #131 on: July 12, 2017, 03:21:47 AM »
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.

_JJ_

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Re: VDTH - Videocon
« Reply #132 on: July 12, 2017, 06:37:12 AM »
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.

mountboney

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Re: VDTH - Videocon
« Reply #133 on: August 24, 2017, 07:37:01 AM »
Anyone still in this?

Looks like a 8-9% deal spread with almost all approvals obtained, Oct 1st target closing and a London listing to follow.

Am I missing something? Why the 8-9% spread?

mountboney

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Re: VDTH - Videocon
« Reply #134 on: August 24, 2017, 10:03:16 AM »
79.4  current dishtv price in rupee
2.02 dish shares for each videocon share
.0156 current fx rate
4 videocon ADR multiple
=
10.0 deal value per vdth share
vs
9.15 current vdth price
8.5% discount


misterkrusty

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Re: VDTH - Videocon
« Reply #135 on: August 24, 2017, 10:13:43 AM »
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.

mountboney

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Re: VDTH - Videocon
« Reply #136 on: August 24, 2017, 10:20:41 AM »
Thanks for the feedback


writser

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Re: VDTH - Videocon
« Reply #138 on: January 12, 2018, 07:25:39 AM »
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.
« Last Edit: January 12, 2018, 07:28:16 AM by writser »
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

misterkrusty

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Re: VDTH - Videocon
« Reply #139 on: January 12, 2018, 10:17:40 AM »
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?