re: Ann: MNF enters into Heads of Agreement t...
Phishi, back and with a vengence!
I do believe that Skype is a large client of Symbio. Not sure of the any current issues that threaten this long term relationship. I don't think that Skype would percieve MNF as any more of a threat to their business than it has been for the past 5+ years. But who knows?
I believe the price that MNF will pay for $20M Revenue Symbio is directly related to Symbio financial performance over 3 years which is a minimum of $2M and a maximum of $6M, seems fair to me. Also, this purchase is being funded out of MNF money in the bank and ongoing MNF cashflow and profits, no loans or capital raising. Pretty impressive stuff.
Don't overlook that fact that the 2 major shareholders have an enviable and undeniable track record of building 2 successful (read PROFITABLE) companies in parallel over the past 5 years with a combined revenue of $33M. In the new model those same 2 guys will have both entities under the one roof, there has to be a benefit there.
Anything to do with NBN is a little unclear at this point but Hackett makes good points with the current known metrics. On present evaluation the smaller ISP's look to be at a major disadvantage but the market being what it is will likely address this imbalance in an effort to wholesale more bandwidth that they are committed to purchasing. Hacketts views as a market analyst are not always on the money however in this instance he is doing the smaller ISP's a favour by highlighting their issues, which is a good thing for these smaller ISP's.
I see as possible the prospect of a lot of the smaller ISP's perhaps banding together and becoming the IGA of the ISP business if they are forced into an anti-competitive corner. If this were to occur with a larger well known company with mindshare and market presence this could be a good outcome for all concerned. Of course on the provisio that the current smaller shareholders are able to actively participate/share in the new entity.
The net value of any ISP is it's unique technologies/IP and/or it's USP's, if they have any, but overwhelmingly it is it's client base. Whether these are sold to another ISP or joined via merger will achieve the required goal of increasing an entities overall client base either by association or aquisition.
It is a waiting game at present. The guys that run MNF & Symbio are no fools and I am sure that they will come up with something to mitigate any potential threat to the business.
This I expect will be in the form of emerging technologies and opportunites that differ from the present ISP & VSP products that we can see today. For example, products aligned with cloud storage, data warehousing and applications services come to mind. Symbio also brings a lot of backend switching technology and IP. It's primary shareholders are hands on and engineering based, not merely financial investors.
It is a waiting game. In the meantime the SP is holding at a respectable level, dividends have been paid and the future appears predictable, to a point.
Revenue for the next full financial year will jump up from ~$13M to somewhere closer to $33M so not too shabby.
MNF Price at posting:
20.0¢ Sentiment: Buy Disclosure: Held
