Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi Team, 1)How do you see the downside for SKS, SXE, NXT? 2) Is SXE affectedby the fall out in NXT? 3) Can you see a class action coming against SKS? I assume they probably have knowledge of the problem at NXT when they sold a significant position. 4) Is there any repercussion against the Firmus team when they announced the book was more than covered? Thanks & regards
Hi Sidney,
There’s a lot of questions rolled into one here!
SKS Technologies (SKS) – Down 36% over the past fortnight, caught in a global AI and data centre sell-off, amplified by NXT, with salt rubbed into the wound on news that directors Peter and Greg Jinks and CEO Matthew Jinks sold 10 million shares before the NXT issue was disclosed. We would imagine that ASIC will look at this, but we’re not sure about a class action.
Southern Cross Electrical Engineering (SXE) – The DC sector has less money to spend on development now than many thought it would a few months ago, i.e. Firmus not getting its IPO away and NXT now having issues are clear negatives for contractors within the space. Less money, more uncertainty and potentially lower earnings = lower valuations.
NEXTDC (NXT) – NXT has been in a world of pain this week, falling to levels not seen since before COVID. We covered the stock earlier in the week here, after its ~40% fall, and not a great deal has changed.
In terms of repercussions around the Firmus bookbuild, ASIC is taking a look, but if the message was legitimate at the time and supported by data, then there shouldn’t be an issue. The bookbuild initially works on non-binding, indicative demand that then gets firmed up into binding bids. From what we hear (not confirmed), there was one large US investor who indicated demand for $1bn but pulled it because of CDC walking away from its deal with Firmus.
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