Well, this is not the first auction and let us review the history: after the last auction the price jumped from $0.7 to $1.7- I explained why in one of my previous posts here.
This auction is at $1.5 (higher end) and the same reasons still apply- and are even more relevant with Ting being around.
After the actual intrinsic value is determined, the anomaly (low- non indicative price) will no longer be there. All in all- the next move for investors is clear, and as we say here- "hold the elk by the horns- especially when the weather gets warmer in Ostersund"
Greetings from your nordic friend- Olaf Stiermayer.
The interesting point is market reaction. As it can be assumed that the major amount of trading on TCX is made by machines (based on algorithms/decision rules), there is an unnclear pricing issue here. Based on auction details - price should be at $1.5. Somehow robots did not grasp that, hence- current price (~3% below auction max) is to change, abruptly, post completion. Meanwhile- wishing you a snowy happy Christmas!
In any case- the price is to be determined today - as always if it wasn't for the deadline...
I consider the high volumes we will see today and tomorrow around $1.5- as opportunities to make significant trading moves- either in- or out.
The optimal timing in... now.
As to the optimal move (buy/sell) that needs to be done today: please read my previous posts...
I am really impressed with the size of the dutch auction, and I think that a person would really have to have a strong desire to sell to even consider tendering shares. I don't think that they will get anywhere near 6.5 million shares and this will lead to another auction at a higher price. If they can consistently grow eps at 20%, which should be easier with the huge buyback, this stock should go over $2 very quickly. If Ting starts cooking, who knows, we could eventually end up between $3-4.
Yes. It happened as propheted. As you see the $6M were not absorbed - as assumed- and the expected direction (already ~20% above the $1.5 auction price) already materialized.
TCX has an ongoing "buy" mandate - off auction and the copmany keeps buying- (It is not clear if the loan facilities can be used for this purpose) but at his point there are additonal buyers joining the party (see below).
In any case- the market has spoken- stating that $1.5 was not enough - there is more greed out there - and the current volumes are aroung $400K at $1.75.
Next phase is clear, and the computerized speculants *that are triggered algorithmically) will rise
volumes to a daily $800K or more. The downfall point is also clear and determined by those BOTs (so is the preliminary upside).
Timing is everything- felllows, and as we say here up-north- the peaks are white and the snow is sweet - till it gets bloody (but then we know when this is gonna happen...)
Your Nordic Chap
One: Is the company going to be a cash cow? Earnings have increasingly been more dependable over the past 2 years, and the turnaround (new vision for the future) continue to be revealed. As a result of not having any major missteps, earning continue to improve.
Two: The buy back is going to probably be used to sell those shares back into the market at some future point if capital is needed, and so it makes sense to buy back now. If TCX can start earning in the neighborhood of 20 cents a year consistently, then we will have a nice winner on our hands.
It looks like ting will require another Q or two to see how it shakes out, and whether it can contribute a couple of cents to earnings. The startup costs are significant, but its a great plan and a good idea. The problem is that there is risk with the space quickly saturating (albeit relatively low risk for now)