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Avanti shares slip despite another ramptastic RNS - Emperor Williams New Clothes called out!

By Tom Winnifrith | Saturday 12 March 2016


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Historically the pattern with Avanti Communications (AVN) has been it is asked an awkward question like how much business do you do with ISIS? Or why is it that your 2015 joke accounts are being looked at by the FRC? Or, if your bonds are junk rated when do you go bust? Its shares tumble. Then it announces a new ramptastic contract win either of an unspecified amount or for many years in the future. Its shares bounce but then fade and slump when the next question is fired over.

Each time the bounce after the ramptastic RNS signed off by Emperor CEO David Williams is that little bit smaller as fewer and fewer folk accept that his new Clothes are really that impressive.

Friday saw a first. A ramptastic RNS saw the shares fall on the day - albeit by just 0.75p - to close at 99.75p to sell. Either folks saw the positive news and immediately assumed that there was something bad that Avanti was reacting to but they did not know about or folks these days just do not believe anything Emeror Williams has to say.

As it was the RNS boasted of a contract win for HYLAS 4, yes that is right 4. Emperor states:

Avanti Communications Group plc ("Avanti" or "the Group"), a leading provider of satellite data communications services in Europe, the Middle East and Africa announces its first pre-launch contract for capacity on the HYLAS 4 satellite.

Avanti will supply Bentley Walker, one of its key existing customers, with capacity on HYLAS 4 across Sub-Saharan Africa in a $1 million + commitment. HYLAS 4 is on-track to be launched in the first quarter of 2017. It is a 28GHz satellite and will complete Avanti's coverage of Europe, Africa and the Middle East.

Yadda, yadda, yadda.

The problem of course is that the Emperor cannot fill up capacity on Hylas 1 & 2 which are in orbit so he needs to fix that before we talk about HYLAS 3 and 4. Avanti will have run out of cash before Hylas 4 makes its way into space. That is why the shares remain a slam dunk sell - target 0p.


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