Here is what the said crap reporting is saying:
- Intel may take 7pc stake in Green Packet
By Goh Thean Eu
gohtheaneu @nstp.com.my
INTEL Corp may pay about RM65 million for a seven per cent stake in Green Packet Bhd, a deal that gives the US chipmaker a larger footprint in the global wireless broadband industry.
Intel, whose chips are brains to most of the world's computers, has been constantly investing in companies in the telecommunications sector, including broadband.
So far, it has stakes in companies like Bulgaria's Nexcom, an Internet service provider using WiMAX technology, Egypt's Orascom Telecom Wimax Ltd, and UK's Freedom4 among others.
"Intel is probably looking at around a seven per cent stake in Green Packet, for about RM2.80 a share. Green Packet is expected to issue new shares to facilitate this deal," said an industry source.
The deal could turn Intel into Green Packet's fourth largest shareholder, ahead of Goldman Sachs, a US investment bank that holds 5.76 per cent.
Intel chairman Datuk Dr Craig Barrett is expected to be in town on Monday, to attend the World Congress on Information Technology (WCIT) 2008. A signing ceremony between Intel and Green Packet is due to be held on the same day.
In a statement, Intel said that "it will announce its investment in a listed Malaysian telecommunications company". Green Packet plans to hold a signing with a "global IT partner".
Green Packet shares have done better than the broader stock market so far this year. It was traded at an average of RM4.22 in 2007, with a high of RM5.90.
The company made a net profit of RM30.16 million in 2007, against RM55.29 million in 2006. The lower earnings is mainly due to slower growth in China, and the investments for its WiMAX operations.
This same story was also being featured on CBS MarketWatch, Intel to announce Malaysian investment on Monday
- Intel Corp. will likely announce on May 19 that it is buying a minority stake in Malaysian high-speed wireless broadband operator Green Packet Bhd (0082.KU), a person familiar with the deal said Friday.
Intel's entry will help Green Packet - which will soon launch Malaysia's first WiMAX broadband service - break into other markets in the region, the person said.
Details of the deal aren't immediately available.
Intel said in a note earlier that it will announce an "investment in a listed Malaysian telecommunications company" at 0400 GMT on May 19, on the sidelines of the World Congress On Information Technology 2008.
The investment - if it goes through - will come just weeks after Green Packet Managing Director C.C. Puan said in a May 2 interview with Dow Jones Newswires that the company was in talks to secure a strategic foreign partner.
Green Packet shares have been on the rise since then, gaining as much as 23% and outperforming a 2% rise in the benchmark Kuala Lumpur Composite Index.
The shares were last traded at MYR2.77.
Puan had also said that Green Packet expects to roll out its 2.3Ghz WiMAX broadband service in June, targeting revenue of MYR1.0 billion from the business by 2012.
So since Green Packedt had been saying it's in talks to secure foreign partner since May 2 and since Intel had mentioned it will announce an investment in a listed Malaysian investment telecommunication company, this PERSON (who is familiar to the deal), this INDUSTRY SOURCE is telling the whole world it's had to be Green Packet.
How?
At this moment of time I am curious. Who and what is a person familiar to the deal? Who is this Industry Source?
An insider?
Would this be same as leaking of insider news?
Would it?
I do not know.
All I know is that I had blogged on Green Packet several times.
Firstly on Green Packet's overly aggressive share buybacks: Regarding Green Packet's Share Buybacks. and Update on Green Packet's Share Buybacks and then on its earnings, Green Packet Earnings and More On Green Packet
And if you read these postings, you would understand my displeasure against this company.
Firstly, the earnings announced in Feb was utterly poor.
A quarterly net earnings of only 277k??? Which was so rather ironic when you look at the chain of events.
You have the stock price collapsing.
And then you have the company buying back their shares aggressively.
Way too aggressive.
- from Dec 26th 2007 to Jan 2nd 2008, Green Packet's share buybacks saw it paid a lowest price of 2.38 and a highest price of 2.93! ( ps. that's a price differential of a whopping 23% in the share price in a mere 5 trading days. So how could anyone not be suspicious that perhaps Green Packet had used its share buybacks to push the stock higher?)
( 4 Feb 2008: Corporate: Taking a chance on Green Packet and 25 Feb 2008: Corporate: 'Transformation year' for Green Packet. )
And when Green Packet announced its earnings, it announced a net quarterly earnings of only 277k!!!!
So how?
Could Intel make an investment into Green Packet?
Ok I do question why Green Packet but I won't say this deal is not possible! In fact, it's possible but we shall see come Monday!
And all I will say is any company can make any investment. Sometimes the investment pans out but sometimes it fails. And sometimes, even big name companies can screw up by making some rather lousy investments. It does happens! (Transmile comes quickly into my mind!).
Dear all,
ReplyDeleteHere is an update:
1. Intel is indeed buying a stake into GPacket... but
21-05-2008: Green Packet share price dips
by Yong Yen Nie
PETALING JAYA: Green Packet Bhd’s share price could only muster a 1.5% rise to an intra-day high of RM2.80 following its announcement of a RM50 million investment in the company by Intel’s subsidiary Intel Capital.
Upon the resumption of trading in the afternoon session, the stock rose as much as four sen and the upside could not be sustained as it fell 24 sen to RM2.52 at the close with 3.31 million shares changing hands, in line with the overall weaker market.
The stock has been steadily moving since May 12, when it was last traded at RM2.50.
Intel Capital’s investment in Green Packet is aimed at deploying the country’s first nationwide WiMAX network targeted to be commercially available from the end of next month.
Green Packet proposed the issuance of RM50 million four-year 4.5% guaranteed redeemable convertible exchangeable bonds to Intel Capital.
Its subsidiary Packet One Networks (Malaysia) Sdn Bhd (P1) would be the guarantor for the proposed issuance.
Pursuant to the agreement, Intel Capital could convert the bonds into Green Packet shares of 20 sen each at the conversion price of RM2.80 per share, which would result in the former becoming its major shareholder with a 6.32% stake in the company.
Alternatively, Intel Capital could also convert its bonds into P1 shares of RM1 per share, should the latter be listed at the time of exchange.
P1 was awarded one of the four 2.3 Ghz WiMAX licences by the government, for which it is to roll out wireless broadband to 25% of the population by year-end.
However, the group’s earnings per share might be reduced by 0.5 sen pursuant to the proposed issuance, due to the increase in its paid-up capital, based on the full conversion of bonds by Intel Capital into Green Packet shares.
Research house HwangDBS Vickers said while the exercise would be positive to Green Packet, it believed profit contributions from P1 to Green Packet would be minimal for the initial years of operations.
It has put a buy call for the counter at RM2.76, with a target price of RM3.60, and is currently reviewing its forecasts, price target and recommendation for a downgrade, as it expects Green Packet to incur losses for its first quarter.
“Our preliminary estimates indicate a 70% cut in FY08 net profit to RM12 million from RM46 million. Our conservative estimate factors in a fraction of internal revenue targets, while our valuation imputes a wide 50% discount to its WiMAX discounted cash flow,” HwangDBS Vickers said.
2. Green Packet is now LOSING money!!!
22-05-2008: Green Packet slips into the red
KUALA LUMPUR: Wireless broadband provider, Green Packet Bhd (GPB) has entered into the red for the first time due to a slowdown in its business in China, a higher share of losses by associated companies and heavy promotional activities for its broadband business.
Green Packet reported a loss of RM2.73 million for the first quarter ended March 31, 2008, on a revenue of RM22.34 million. It also said in a statement yesterday that the intensive level of activities of its subsidiary company WiMAX operator Packet 1 Network (M) Sdn Bhd to set up its network also played a part in the loss.
“Our substantially higher investment in the broadband business this quarter is expected to ensure the successful commercial rollout of our WiMAX services very soon,” group managing director and CEO Puan Chan Cheong said in a statement.
Green Packet announced last December that it would continue to invest through 2009 to solidify its converged telecommunications business pillar. Capital investment was expected to be highest during this current phase with the setting up of network infrastructures and intense customer acquisition activities.
Intel Capital announced it had invested RM50 million in Green Packet and would work together with P1 to deploy Malaysia’s first nation-wide 802.16e WiMAX network.