Friday, September 24, 2010

Update on Green Packet

Blogged on 17 Aug 2010: Green Packet Announces 10th Consecutive Quarter Of Losses!

I asked one question which needed to be answered: 'At this rate, got enough cash ah?

Let me reproduce what was written:

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Green Packet announced its earnings last night and as expected, the earnings were horrible.

How should I put everything into perspective? Well, on 13th May 2010, I wrote the following posting: Oh Yeah, Green Packet Lost Less Money. I list out a list of facts. I reckon it's best I update the list of facts.

I will update the list and use red to strike out the past 'facts'.

Fact. It lost some 44 million 35.9 million for the quarter.

Fact. This is the 9th 10th consecutive quarter of losses. 30 month of losses,

Fact. Green Packet's total losses for last 27 30 months equals some 275 310.9 million!

Fact. Green Packet raised some 98 million via rights issue last Aug. 2009.

Fact, Jan 2010. Green Packet raised some 69.176 million from a share placement.

Fact. After the rights issue, the following quarter, November 2009, Green Packet said it had some 174 million cash and some 209 million in borrowings.

Fact. After tonight's earnings, or 6 9 months later, Green Packet said it had some 111.699 102.800 million cash and some 256.376 264.214 million in borrowings.

Fact, Nov 2009, Green Packet had 68,691 in trade payables. In Feb 2010, trade payables grew to 159.192 million. Today payables total some 188 200.870 million. (Why so much payables nowadays? Who is Green Packet not paying? )

So how?

Green Packet owes its bankers more money, yes? It's debts had increased.

It has less money, despite the rights issue and placement of shares.

So is less cash and more debt good?

At this rate, got enough cash ah?

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I forgot all about P1's deal with SK Telekom.

GREEN PACKET BERHAD ("GPB" OR "THE COMPANY") PROPOSED ISSUANCE OF 979,474 CLASS C ISLAMIC IRREDEEMABLE CONVERTIBLE PREFERENCE SHARES OF RM0.10 EACH (“CLASS C ICPS-i”) IN PACKET ONE NETWORKS (MALAYSIA) SDN BHD TO SK TELECOM CO., LTD. FOR A TOTAL CASH CONSIDERATION OF RM322.91 MILLION (EQUIVALENT TO USD100 MILLION) (“PROPOSED ISSUANCE”)

Yeah.. many thanks to SK Telekom, Green Packet does have extra 322 million to burn.

ps: This posting is merely to state the facts yo!

Seriously? I do not make postings with any hidden intent.

Wait... here's my disclaimer again.

Disclaimer
1. I am a nobody.
2. I am not responsible for anyone's investments.
3. I am not a sotong. :D
4. I am certainly not an independent investment advisor.
5. Since I am not an in dependant investment advisor, I cannot guarantee that you should lose money.
6. Most important, I find no motivation to talk about stock price movements. Yeah, I do not indulge in guessing what a stock price will or will not do. So please spare me all the chats that you think this stock will go down by so much or this stock will soar by so much.

9 comments:

Richard Cranium said...

Recently, they were given some spectrum for LTE. Which will kill their investments in all their existing infrastructure, right?

And LTE was also given to the big boyz. Die la, Green Packet.

Moolah said...

That is such a valid issue.

If they don't go for LTE, they would lose out - BIG TIME!

And now that they have gone for it, what then? More money to be burned? And yes, what about ALL their money poured into Wimax???

Where's the ROI?

Some fun reading stuff.

http://www.glgroup.com/News/Trend-watch---Is-Mobile-Wimax-network-evolution-dead--49821.html

Quote:Based on my many years background in the Wireless infrastructure industry, I realize how essential is the ecosystem for any new technology to survive, if chipmakers don’t see a robust growth of subscribers then they won’t develop the semis, likewise, the infrastructure vendors won’t develop key network components and the handset vendors will shy away from manufacturing handsets that no one will buy. I was fairly bullish on Wimax in 2007, especially for the international markets but now like many others in the Wireless infrastructure industry, I am skeptical about the evolution of mobile Wimax. Unless there is a major LTE surprise, I see the trend that tells me that the sun may be setting for mobile Wimax evolution.

I-notice said...

if they go to LTE they need another few more hundred millions in upgrading their equipment which sorry to say can't be reused for LTE nor "upgrade'able" ... they will need to reinvest to maintain two layer of network, similar to GSM, 3G network both at the same time. And to an operator this will double their 'operation cost' ... which means they will keep burning off the cash/payables they have. And if they don't achieve 500k subscriber with a monthly CAGR of MYR150, ... 0082 will ceased to exist. It is a slow dead unfortunately which is the most painful. Ahem... everyone has LTE, and with any sharp business acumen businessman who is familiarise with Telco market, it is a dead end. with broadband, the one who is making big bucks is itune, andriod app, app developer... :) these operator/carrier has is just bigger and bigger dumb pipe to deliver our torrent data (thank you sean fanning).

K C said...

Green Packet keeps on burning cash! That reminds me of the technology bubble in late 20th century; the higher the burn rate of a tech company, the higher the valuation of the share. What is the next story, Mr Pung?

Jason said...

The issue is not so much about technology, Wimax or LTE. Anywhere, they are based on the same technology OFDMA and 70% to 80% equipments are reusable should they upgrade to LTE. Just look at GSM and CDMA, they can co-exist The issue, I think is the business model. The better bet will be YTL Comms (now under YTL Power) as the model is based on mobile wimax as compared with P1's fixed/portable wimax. YTL already obtain license for 018. Imagine, with their nationwide roll-out, they can offer calls based on capacity (100 hours talk time equals to 1GB data equivalent) rather than per minute charge on their network. So the model is based on converged data and voice with mobility. if they do it successfully, the existing mobile telco will suffer. To lower the cost of their wimax android phone/dongle, they bought wimax chipset in bulk ( 1 millions) from GCT. Currently, LTE's equipment price is at least five times that of wimax. So Wimax is not dead yet and the upcoming 802.16m standard is comparable in performance to LTE.

I-notice said...

a business has to have low opex to maximize profit/return. and unfortunately your business entirely tied to how much your tehnology can earn for you; and how much longer YTL willing to subsidize consumer to take up r wireless broadband, that if they deliver the "user-experience" they wish... from the beginning YTL should be doing fine, you'll experience what 3G operator might face in later stage. samsung and cisco can't do wonders. or you can check out the forum of all P1 users experience after their 1st month with P1 lapse... it is similar to a bandwidth ponzi scheme hahaa... serious!!

you have your believe, .. it is all sales pitch of vendor. and you didn't know voie over ip over the air through OFDMA so call wimax cannalised their own data bandwidth uh??

anyway, luckily TNB renew the IPP YTL power leasing uh... otherwise, yeoh family would be furish to see 2.5billion over 5 years they subpoen from YTLpwer still don't have positive EDBITA!! for sure i am not touching anyone of Wimax/TD-LTE operator stock...

bullbear said...

In some industries, new entrants need to commit LARGE amounts of capital, with NO assurances about how the incumbents and their suppliers and customers might react, and therefore whether there'll be a profit to be made at the end of it. This is particularly unappealing where the investment is highly specific to the opportunity, making it unrecoverable if the venture fails.

Looks to me Green Packet is in such an industry. Your continuing highlights on its losses are of interest: Will Mr. Puan's venture subsequently succeed or fail? Is the outcome obvious or is uncertain and yet to be seen?

Moolah said...

bullbear: I have made 28 postings on Green Packet.

The first 2 is about its sharebuybacks. Classical examples.

http://whereiszemoola.blogspot.com/2008/01/regarding-green-packets-share-buybacks.html

http://whereiszemoola.blogspot.com/2008/02/update-on-green-packets-share-buybacks.html

And you can read the rest via label Green Packet and check if there is ANY inconsistency.

This one is fun: http://whereiszemoola.blogspot.com/2009/08/green-packet-again.html

Of course in the corporate world there is NO assuarances. :-)

ps: does my bad habit of making continued highlights bother you also?

ps/ps: If you read this posting properly, I had stated Green Packet's cash/debt position had worsen... BUT... in light of SK Telekom's so-called investment.. that statement has a very good chance for being NOT true because SK Telekom's thingee will add some 322 million to Green Packet's cash balances. (yeah money to burn. :P)

Should I state this issue? Or should I keep quiet?

:-)

bullbear said...

>ps: does my bad habit of making continued highlights bother you also?<

Not at all. I read your posts for interest too. ;-)