Dear all,

In a moment of madness went long on MONI following Hammer on Friday on basis most beaten up stocks last to rally in extended bull run.

MONI has dropped from 1999/2000 high of 14.00 say or 1400p, FTSE Closed Friday 3952.60, reached high 6950.60 on 30th December 1999, Marconi Corporation starts 19th May 2003, presentations to analysts tomorrow 7th May 2003.

Approx 2003 low 1.13p, recent highs approx 2.50p

Hammer on Friday roughly 0.01p head ie very bullish 1.56p/1.55p with tail to 1.35p approx, needs to close above 1.50p/1.51p today IMHO to double hammer 1.55p/1.36p with high 1.58p, mid low 1.38p

On following logic I think MONI could go to 4.00p (3.98p) if break of 2.50p confirms

UKX C 02.05.2003 3952.60/6950.60 (UKX H 30.12.1999)x 1400p x 0.005 (0.50% post D4E)=3.98p



Views/opinions bull/bear please, I am long thinking could be biggest winner of May 2003 assuming the city are going to ramp the hell out of it when they own 99.50% of the company post D4E

All IMHO, NAG, DYOR etc, etc

Cheers

Ash

LONDON (AFX) - Senior executives of troubled telecom equipment maker Marconi
PLC are set to go on a major charm offensive with investors on May 7 ahead of
the planned listing of Marconi Corp shares on May 19.
Marconi expects the UK and US courts to approve its huge debt rescheduling
plan in about 12 days time, enabling Marconi shares to start trading on May 19.
The company will tell investors that Marconi Corp's balance sheet bears
little resemblance to the old Marconi PLC.
As of Dec 31, 2002 Marconi Corp had net debt of 184 mln, gross debt of 788
mln and cash of 602 mln stg. Marconi PLC had net debt of some 3 bln stg and
gross debt of 4 bln.
Senior executives will also set out the strategy, products and services of
Marconi Corp.
Marconi's rescue plan, needed to avoid insolvency, involves a 4 bln stg
debt-for-equity swap with creditors, which will cede them 99.5 pct of the
company.
Under the terms of the proposed scheme creditors will also receive 340 mln
stg in cash. And as well as shares in the new company, to be renamed Marconi
Corp, they will also get a pro-rata share-out of loan notes.
tf/jc

Hi Ash

haven't got a clue what all that means as I tend to buy and sell on intuition

not a bad trading statement - cash up and although a decline in sales, he fall is lessening and their appear to have been some positive RNS's recently

still - too much risk for me to be holding the baby on 19 May and i wouldn't really want to mess about with the warranties when I could just buy a slice of the new company

I can only see this slowly sliding as the reality kicks in for those still with long term holdings

Good Luck

Dick

LONDON (AFX) - Mike Parton, chief executive of telecom equipment maker Marconi PLC, said he expects tough market conditions to continue this year.
"The market is very tough at the moment. I think you are seeing that from what all our competitors are saying too," Parton told reporters.

"We are not calling the bottom of the market or an upturn. The market is very tough and we expect the market to continue to be tough for the rest of this calendar year," said Parton on a conference call.

"We are managing our costs and our cash as best we can," he added.

Earlier the company reported a further fall in sales for the three months to March 31 2003. Sales from the core business fell 7 pct to 426 mln stg.

But Marconi said it had lifted its margins to 24 pct and beaten targets on expenditure reduction.

Marconi is close to completing a rescue plan with its creditors which will see 4 bln stg of debt swapped for cash, loans and shares.

The company is due to relist as Marconi Corp on May 19.

tf/slm/

Ainsoph,

Has just reversed up to 1.50p with offer turning blue at 1.52p.

Hopefully move now. 1.51p, 1.53p, 1.58p key

Cheers

Ash

I am sure they are tradeable but not keen to hold over night and not convinced on your longer term targets :-))

Ainsoph,

The point that is important is this, MONI have 1,161,000,000 cash up from 76,000,000, I still see rally to 19th May 2003 personally with effectively two hammers to 1.36p/1.44p, our break points are in effect 1.51p, 1.53p, 1.58p

LONDON (AFX) - Marconi PLC said the total cash balance stood at 1.161 bln stg at March 31, the end of the fourth quarter, an increase of 76 mln during the quarter, driven by further reductions in working capital, disposal proceeds and foreign exchange translation gains.

This was the second consecutive quarter of positive operating cash flow.

Mike Parton, chief executive said: 'We have made further progress in the last quarter, comfortably beating our published operating expenditure run rate target and continuing to generate cash.

'The markets for our products and services continue to decline but we have been able to limit our sales fall to single figure percentages in each of the last three quarters. With our financial restructuring almost behind us the business is well placed for any market upturn.'

In a trading update, the telecoms equipment maker said sales in the fourth quarter to end-March were down 7 pct at 426 mln stg from the previous quarter, or 4 pct lower excluding the impact of core business disposals and closures completed during the third quarter.

Market conditions in the core business during the quarter remained tough across all major geographic regions and worsened considerably in the Middle East compared to previous quarters as a result of the military conflict in the region.

Marconi also said it has been selected as one of two preferred suppliers of next generation 10G, or Gigabits per second, Dense Wave Division Multiplexer and Synchronous Digital Hierarchy products for the inter-capital, metropolitan and regional networks of Telstra Corp.

Referring to trading it said in the fourth quarter, core gross margin before exceptional items continued to improve to about 24 pct from 22 pct in the third quarter despite lower sales volumes and core operating cost annual run-rate before exceptional items reduced to around 490 mln stg by March 31, below the 520 mln stg target run-rate.

Further actions were initiated to reduce the annual run-rate to below 450 mln stg during the current financial year to March 31 2004.

At March 31, the group employed approximately 15,300 people in its core business, down from just over 16,000 at the end of December 2002.

Marconi expects Core headcount to fall below 14,000 as it continues to implement its cost reduction initiatives and, as previously disclosed, the group will continue to incur exceptional cash costs in order to complete the further planned headcount reductions.

In April, creditor groups of Marconi PLC and Marconi Corp voted in favour of the group's rescue plan and the group is now moving to achieve the final legal approvals from both the UK and US courts.

Marconi shares are then expected to re-list on May 19.

Marconi today confirmed that it will issue Junior Notes TO the amount of 487 mln usd. Upon completion of the restructuring, Marconi expects its gross financial indebtedness to amount to about 796 mln stg.

anna.boekstegen@afxnews.com

acb/rn

Ash

the cash is irrelevant - it will all go to creditors at the swap

if anything, in squeezing areas like R&D what has that done to the company's long term prospects?

Dick,

Good points, however I am more interested in UK Investor sentiment, MONI looks cheap, the UKX DJIA and S & P are rocketing right now, and sooner or later that is bound to rub off on shares like Marconi that have fallen from 1400p to 1.25p lows and started to rise.

My kill zone is now to 19th May 2003, during which time I expect a run on the share price, after that who cares, although I would expect the 99.50% equity holders to be promoting the shareprice like crazy.

Cheers

Ash

I think the point is that by any fundamental analysis of moni and its markets it is so heavily over valued at 1.5p that a run is unlikely

still good luck and i admire (not literally) your balls

Hi Ash
I've been following your discussion with DD with interest. I am quite convinced that your stance re sentiment is valid. After all, the internet boom was totally based on sentiment and never had anything to do with fundamentals.

Whether the sentiment will be right for you with MONI I cannot say, but I wish you success if only for your courage.

[:-)

think I missed an anouncement somewhere - what exactly is the deal for existing shareholders under the restructuring - I did see that the creditors will own 99.x% or something, but then what?

Tia

shareholders get 0.5% of the new company

Ash

FYI - in the telegraph it said that the grey market for the new company had rsien from 25p to 40p valuing the new entity at 400m

looks like the penny is dropping

Dickdastardly,

Not at all, if MONI bounces above 1.35p it is a triple bottom which is even more bullish than ever from a ta perspective.

MONI has always been held above 1.13p which equates to US$50m at ROE US$1.58/1.00, so to me at any where round these levels with upside I think to 2.98p to 3.98p potentially, not less than 2.50p and downside of 0.22p at 1.35p to 1.13p versus upside arguably of 1.63p to 2.63p at this price not less than 1.15p, ie somewhere around 5.23 to 7.41 to 11.95 to 1.00 bulls will come in IMHO.

Cheers

Ash

aplogies ash

i didn't mean tht to refer to you but the market as a whole

if the new company is valued at 400m that makes the current cap far more than 0.5% of it

Dick,

So what, the equity right now to 19th May 2003 is 100% albeit with large debts but a much larger than expected cash balance of 1,161,000,000.

Banks holding 99.50% of equity are hardly likely to sit on their hands, plus I would think the new MONI is going to therefore be well supported.

MONI shareprice has been down for three years now after a ten year approx bull run to 1400p, 1.35p is a higher low than 1.13p, the trend is reversing with higher support and higher resistance 2.50p IMHO.

Looks more like a W bottom to me.

Cheers

Ash

give the current situation I personally think conventional technical analysis does not apply

neither fundamentals as at the end of the day you are only valuing 0.5% of any change in the company's trade

anyhow

Good Luck

Dick,

Well one thing is for sure until MONI breaks north of the 8 day EMA it is like watching paint dry.

Hoping MONI seemingly highly geared to a UKX move, follows a surge back on UKX.

Two biggish trades at close of 3m shares each 1.422p and 1.462p versus 1.38p/1.43p so someone seems to think so.

Cheers

Ash

Morning all,

Socks,

Watch out for those larger than normal trades today, DJIA held above the 8475.00 level in very narrow trading range of 40 points for 4 hours odd and UKX no doubt will rally above the 3943.00 level as a result (46.53% of 8477.36 DJIA L is 3944.50)

For MONI level above 1.35p/1.36p bid is critical in rally making above the 1.50p/1.51p neckline area.

Investor sentiment in the lead up to 16th May 2003 full moon next Friday is all important, am expecting bigger stocks to start to peak by then,hopefully then rolling down to much smaller plays like MONI eventually in the sub 50m market cap bracket which have not even started to move up yet from March market lows (MONI January/April lowest closing 1.35p/1.50p).

UKX L 12.03.2003 3277.50 H 07.05.2003 4038.50 plus 761.00 points.
DJIA L 12.03.2003 7397.31 H 07.05.2003 8641.22 plus 1243.91 points

Good luck today

Cheers

Ash

Socks,

At long last it seems to be rising from 1.35p lows reversal so far to 1.40p, needs to get over that 8 day EMA though.

Cheers

Ash

Socks,

Not one of my better calls, 1.30p low in place versus 1.13p in January and 1.35p closing in last 12 weeks.

Hope it bounces here.

Cheers

Ash