By Tom Winnifrith, The Sheriff of AIM | Monday 7 December 2015
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.
David "King of the City bombasts" Williams of Avanti Communications (AVN) always responds to weakness in his company's - grossly overhyped - share price in the same predictable fashion - he announces a contract win. But each time he announces a deal - no value disclosed natch - the market is less and less impressed. This morning what investors really want to know is whether Avanti is making money from evil terrorist murderers ISIS?
But instead of answering that question Avanti announced:
Avanti Communications Group plc announces a new contract with BT, to be part of BT's supply of wholesale consumer broadband services which will be sold onwards to consumers in the UK through a network of satellite resellers under the auspices of the British Government's Universal Service Commitment.
Under this plan directed by Broadband Delivery UK ("BDUK"), up to 300,000 homes which cannot access greater than 2Mbps from terrestrial networks will be eligible to receive a contribution from government to fund the installation of satellite broadband services, with the consumer then paying monthly service charges. The scheme is expected to go live during December.
Come on Williams why not say how much this contract is worth? Perhaps it is because the answer is not a lot in terms of your ongoing cashburn (however you disguise that with interesting accounting policies). The bottom line is that Avanti is drowning in debt and will run out of cash next year.
Blather from the bombast does not wash any more. Sell.
Never miss a story.
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