“You may or may not be aware that Aussie Broadband is shortly intending to list on the Australian Securities Exchange (ASX). As a thank you for being part of our family, we want to offer our customers the chance to participate in the listing by subscribing for shares in Aussie Broadband at $1.00 per share. This is an unusual offer for a company to make, but it aligns with our value of being good to people. Offers to subscribe for shares in Aussie Broadband as part of the listing are also being made to our staff, and to institutional investors. The offer of Aussie Broadband shares to our customers is capped at $10 million, with each application being for a minimum of 2,000 shares and a maximum of 10,000 shares.“ prospectus here: https://www.aussiebroadband.com.au/forms/investors/aussiebroadband-prospectus.pdf
Interesting offer - the prospectus seems to assume a sudden and massive uptick in profit next year so I'd be curious to know the justification for that.
It's a smart way to get customers to refer a friend! I love Aussie Broadband, they've been a fantastic provider for me. I run servers etc. and did a lot of research on the internet providers. AB was the most reliable I could find and in the 4 years I've been with them they've been great .... ...I won't invest in them though. Doesn't fit my strategy. But for people more speculative than I it is a good company (providing service - the financials DYOR) that might be worth a look.
It's a great way to bake-in customer loyalty and reduce churn - most mom-and-dad investors are less likely to leave if they hold shares in the company. I haven't looked at the business or their financials, but as a general opinion - I'd tend to be very cautious of the telco space, especially for smaller players who are largely just resellers and don't own their own infrastructure - there's too much opportunity for disruption (eg 5G / satellite / etc). I'm not sure if Aussie Broadband falls into this category or not.
As a customer, my concern is that shareholders will drive the business the way of internode/iinet/TPG etc. in the search for short term profits (e.g. lower CVC per person, offshoring support).
They don't fall into that category. They have their own infrastructure and to my knowledge don't lease it out to other companies which is how they maintain their reliability. That's my worry too....I don't know how they'll position themselves in the market. At the moment they are kind of a premium service - mid range cost offering. To me that's perfect. Will they go premium service and cost? Or go the way of iinet etc. I used to love iinet in the early days but it went so wrong.
That's a good point - when you have lots of shareholders - your goal becomes increasing profits. If you can't do that by growing the business - then you have to cut costs - and the best way to cut costs for an ISP is to take shortcuts on support and squeeze as much out of your infrastructure as possible. Hopefully they are able to maintain a balance between performance and profits - it would be a shame to see another great broadband company lose their way.
How reliant on the NBN are they though? If the NBN got privatised or became a plaything for the big-3 ... how would the mid-range players like AB suffer? What other spaces are they playing in? They wouldn't have a 5G play like TPG/Voda do, nor would they have a satellite play like the big multinational players. Is their revenue primarily NBN based broadband?
All very good questions for potential investors - hence why I only do broad index funds now. Too many unknowns.
That was my concern when I saw the share offer. I'm tech stupid and I'm very grateful for a few internet for dummies troubleshooting conversations with an aussie.
I got this email from them last week and thinking of buying $2k worth. Not a huge risk if it starts going south.
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