Forum Archive Index - January 2000

["Ben Dutton" <bendutton@sharechat.co.nz>]

Matthew:

It's great that you've done that for your kids - I'm sure the returns will
far exceed what any bank could give you!

Now, playing the devils advocate here, I also noticed the following
statement in Newcall's press release -

"Consideration for the acquisition was completed by the issue of NEWCALL
shares. There is an agreement limiting to some extent the sale of the shares
for a period of time."

Indeed, 1,050,000 ordinary shares were issued at 57cps for the purchase of
EOL.

Now, I think that this raises some important points.  First, Newcall
shareholders have just had their holdings diluted by over one million extra
shares - without being consulted.  Second, what exactly does "There is an
agreement limiting to some extent the sale of the shares for a period of
time" mean?  I find the ambiguity of this statement disturbing.

Does it mean that EOL can't sell their shares on the open market for a week?
A month?  A year?  This is something that I believe shareholders have the
right to know.  I certainly wouldn't want to be a shareholder in Newcall,
knowing that an extra million shares could hit the market.

What are people's comments on this situation?  Indeed, what are your general
thoughts on the dilution of shareholders funds without first asking them and
the practice of not disclosing what the lock up periods for these placements
are?

Best Regards,

Benjamin Dutton

(Disclosure - I do not own shares in Newcall, but am a customer of their
telco services)




----- Original Message -----
From: Matthew Van Veen <mattvanveen@hotmail.com>
To: <sharechat@sharechat.co.nz>
Sent: Thursday, January 27, 2000 6:02 PM
Subject: Re: [sharechat] Newcall (NGL)


> Ben
> Thanks for starting the talk on Newcall. Invested a small amount last
> November for my children as a long term keep for them and to earn for them
> more than the 3% they were getting in their banks. I must admit their
> announcement also threw me a bit however the reply comments are quite
> positive and maybe a good move by Newcall. Newcall have ex Telecom heads
> near their top so experience in their business is good. With ever changing
> ways of doing business probably a strategic move on their behalf and a
sign
> of things to come. The potential for this Company to grow far exceeds
> current share price.
>
>
> >From: "Ben Dutton" <bendutton@sharechat.co.nz>
> >Reply-To: sharechat@sharechat.co.nz
> >To: <sharechat@sharechat.co.nz>
> >Subject: Re: [sharechat] Newcall (NGL)
> >Date: Thu, 27 Jan 2000 17:06:32 +1300
> >
> >Michael, Phil and Dylan:
> >
> >Interesting and intelligent comments. I want to find out some more info
on
> >EOL before getting too excited though like, what their current client
base
> >is and revenues etc.
> >
> >Best Regards
> >
> >Benjamin Dutton
> >
> >(Disclosure - do not hold shares in Newcall, but am a customer of their
> >telco services).
> >
> >
> >----- Original Message -----
> >From: Michael Sprott <MSPROTT@clear.co.nz>
> >To: <sharechat@sharechat.co.nz>
> >Sent: Thursday, January 27, 2000 4:35 PM
> >Subject: RE: [sharechat] Newcall (NGL)
> >
> >
> > > I agree with the thoughts of Dylan and Phil. I must admit that I have
> >had
> >no
> > > interest in Newcall as an investment up until this announcement. The
> > > businesses that they were primarily in were long distance toll and ISP
> > > services were both commoditising leading to an inevitable margin
> >squeeze.
> >I
> > > could not see how this company was going to break into profitability.
> > >
> > > Newcall is already a reseller of toll services mainly to businesses.
> > > Reselling energy obviously fits perfectly with it's business model of
> >low
> > > capital investment. They already have channels to market and billing
> >systems
> > > set up so by adding these type of services to their mix they will add
to
> > > their earnings.
> > >
> > > I may even buy some shares on the basis of this news.
> > >
> > > > -----Original Message-----
> > > > From: Ben Dutton [SMTP:bendutton@sharechat.co.nz]
> > > > Sent: Thursday, January 27, 2000 3:48 PM
> > > > To: sharechat@sharechat.co.nz
> > > > Subject: [sharechat] Newcall (NGL)
> > > >
> > > > I was surprised to see this announcement to the NZSE this morning
from
> > > > Newcall, a "telecommunications" company --
> > > >
> > > > "Newcall has announced that it has acquired 75% of Auckland based
> > > > embryonic
> > > > electricity reseller, Energy Options Limited (EOL).
> > > > The purchase price of $600,000 has been met by the issue of
1,050,000
> > > > ordinary shares in Newcall at 57cps, with all shares subject to a
> > > > restraint
> > > > of trade.
> > > > The total issued capital of the company following the issue of these
> > > > shares
> > > > will be 120,877,685 ordinary shares.
> > > > Newcall have retained the management of EOL, both of whom were
> >previously
> > > > with Power NZ, to ensure industry knowledge and expertise is
> >protected".
> > > >
> > > >
> > > > These statements are taken from their press release --
> > > >
> > > > "EOL has customers in the small and medium size business market, and
> > > > that's
> > > > exactly where NEWCALL is focused. We can offer additional telephony
> > > > services
> > > > to EOL customers and our customers have the benefit of reduced
> >electricity
> > > > prices.
> > > >
> > > > "In fact we were so impressed with EOL that we changed to buying our
> > > > electricity from them early in our discussions, resulting in
> >significant
> > > > savings in our energy bill," (MD Norman) Nicholls said.
> > > >
> > > > Nicholls said, "At one level we are able to share call centres and
> >billing
> > > > systems while at another we have the exciting prospect through our
> > > > recently
> > > > acquired subsidiary, Iprolink, to provide Internet billing and other
> > > > e-commerce marketing to a broader client base."
> > > >
> > > > At a strategic level the move exploits the international trend
towards
> > > > utility convergence, Nicholls said. The purchase mean we have an
> > > > opportunity
> > > > to explore the provision of utility services at a very low cost."
> > > > --
> > > >
> > > >
> > > > Now, I have to admit that this came as a great surprise to me.
> >Newcall's
> > > > purchase of an ISP, yes, that fits within my idea of a
> >telecommunications
> > > > company, but an electricity reseller??  Even though this purchase
> >isn't
> > > > very
> > > > significant to their balance sheet, it does distort my view of the
> > > > company.
> > > >
> > > > What do other members of the forum think about this move?  I'd be
> > > > interested
> > > > in finding out other people's opinions...
> > > >
> > > > Benjamin Dutton
> > > >
> > > >
> > > >
> > > >
> > >
> > >
>
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