# Aastra Technologies (AAH)



## m3s (Apr 3, 2010)

I've held this Canadian company for a few years and just noticed it's starting to pop. Maybe there's an Aastra phone on your desk?


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## P_I (Dec 2, 2011)

You are aware of the upcoming special dividend I trust, Aastra Reports Second Quarter Financial Results and Announces a Special Dividend


> The Company is pleased to announce that, after a detailed review of its business, the Board of Directors of the Company has approved the *payment of a special dividend to its shareholders of $7.20 per share* (the "Special Dividend") payable on August 16, 2013 (the "Payment Date") to all shareholders of record on August 6, 2013 (the "Record Date") subject to the "Due Bill" trading requirements mandated by the Toronto Stock Exchange (see below). Contact your financial intermediary should you have any questions regarding how such requirements may affect the trading of the common shares of the Company (the "Common Shares"). The net cash that will be used to pay the Special Dividend on the Payment Date is expected to be $84 million.
> 
> Because the amount of the *Special Dividend announced today represents a distribution of greater than 25% of the market capitalization of the Company as of the close of markets today*, the Toronto Stock Exchange has required that the Common Shares shall trade on a "Due Bill" basis from August 1, 2013 until the close of trading on the Payment Date. This means that sellers of Common Shares during this period (i.e. sellers in trades settled after the Record Date and entered into on or before the Payment Date) shall also sell their entitlement to the Special Dividend to the respective purchasers of such Common Shares. The Common Shares will commence trading on an ex-distribution basis (i.e. without an attached "Due Bill" entitlement to the Special Dividend) from the opening of trading on August 19, 2013 (i.e. the next trading day after the Payment Date).
> 
> The Board has determined that the Special Dividend represents an appropriate use of the Company's financial resources after completing its review of the Company as it returns excess cash to shareholders while allowing the Company to maintain adequate financial resources to fund its expected capital and other investments, as well as other potential opportunities for growth.


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## m3s (Apr 3, 2010)

I saw that but I was like naw.. it must be 7.2 cents :eek2: This seems like an odd way to manage an extra $84 mil for such a small company... Well that explains the $6.75 rise and I understand shares should drop in theory on ex-div, but this "Due Bill" thing is new to me


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## humble_pie (Jun 7, 2009)

m3s has an interesting habit of finding out-of-the-way stocks, often in avionics or telecommunications, that are still undervalued because they are largely unknown.

aastra is one of these. I had never heard of it. Now it's paying a monster dividend but company is still looking good.

hint to mode: check to find out how that dividend will be taxed. There are a whole variety of possible scenarios. Best one might be to roll dividend payout into cost base; worst one would be to receive dividend as ordinary 100% taxable income.

if the dividend tax consequences are not favourable, in your opinion, some people avoid them by selling the stock at some peak price prior to dividend X date (note: in this slightly freaky due bill case, the dividend X date might possibly occur after the dividend payable date.)

when people sell just prior to dividend X date, they are usually able to capture the full rise of the dividend amount as tax-favoured capital gains. But if they fail to act & instead sit around waiting to accept the dividend, they then have to deal with the less favourable tax consequences.

de toute façon, félicitations.


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## doctrine (Sep 30, 2011)

From their website:
_*
The Special Dividend declared today has been designated as an “eligible” dividend for the purposes of the Income Tax Act (Canada) and similar provincial legislation. *_


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## Barwelle (Feb 23, 2011)

m3s said:


> I've held this Canadian company for a few years and just noticed it's starting to pop. Maybe there's an Aastra phone on your desk?


Mine's a Panasonic... but if it were an Aastra, I'd be wondering if my employer paid too much for it considering the dividend you're about to receive! :rolleyes2:


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## humble_pie (Jun 7, 2009)

doctrine said:


> From their website:
> _*
> The Special Dividend declared today has been designated as an “eligible” dividend for the purposes of the Income Tax Act (Canada) and similar provincial legislation. *_



thank you doctrine

selling the stock could produce a more favourable tax result, since 50% capital gains are the most favoured form of taxable income. Eligible dividends with their tax credits rank only 2nd. 

in the case of high income earners, eligible dividends can create other small dragging problems, since they are usually included in total income calculations by their grossed-up amounts.


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## m3s (Apr 3, 2010)

Thanks I hadn't considered the tax, but luckily it's in my TFSA anyways. Seems like a good short term play for a TFSA? It jumped up $6 on the announcement but divvy is $7.2 (tax free) and with new confidence it "shouldn't" drop back as much? I wonder if some will miss the "due bill" fine print and sell off their divvy by accident?

I think there's a lot of potential growth in corporate IP-based communication but it's hard to say who will come out on top. They've acquired technology from companies like EADS, Nortel and Ericsson over the years. Professionally setup VoIP for business is a far cry from Skype or Vonage


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## Greyhound86 (Feb 21, 2010)

It is going to be interesting to see how this plays out just before and after the dividend is paid out. We have 600 shares that we bought a few years ago in RRSP accounts. 

I would assume that the stock price will go down by the amount of the dividend. Or maybe it won't. Pretty sure we will hold on to our shares.


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## humble_pie (Jun 7, 2009)

holding in tfsa? a 10! 

in rrsp? perhaps a 9+, since that nice big dividend will lose its tax credits & eventually be taxed as 100% ordinary income ... but the tfsa vs rrsp debate is another story for another time another place.

if i were fortunate enough to hold this in tfsa, i'd certainly accept the dividend, which means i'd be holding past the X date. In the meantime i'd be assessing whether to buy more shares if price should dip by more than the amount of the dividend.

one thing that puzzled me on their website is that they don't list their officers & directors, at least not that i could find. Yet their business profile is already focused, multinational, sophisticated. I found myself wondering if those missing executives are, for the most part, ex-Nortel. Note that m3s says they have been buying nortel technoloy, plus ericsson & others.

wait! where did i hear recently about a smart thriving small new company that had been cobbled together out of corpse parts from fallen corporate titans?

oh yes! it was that tiny railway called the MM & A! seems they cut too many operational costs!


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## humble_pie (Jun 7, 2009)

here's a lovely pretzel of entitlements.

AAH buyers today do, i suppose, receive the monster dividend, since yesterday it passed its ex-distribution date.

looks like share price could/may drop on or before august 19th when this heavily pregnant mother goes record its $7.20 dividend (fortunately for england, slender duchess Kate never looked as fat as this.)

aastra is an interesting little-known story, but there are some heavy negatives.

the founder-entrepreneurs are a pair of brothers who are still at the helm. One holds a masters in engineering science from the U of T.

the share price history is tumultuous, because the very nature of the beast has been changeable. Aastra started as an aviation parts supplier roughly 2 decades ago, then switched to telephony, then switched to enterprise networks by buying old nortel & ericsson technology. Share price hi's & lo's have probably followed these massive makeovers.

this causes me to wonder what the chameleon is going to do next.

the founding Shen brothers are the principal shareholders so they will be the principal beneficiaries of this monster dividend. I ask myself if the reason they are paying it to themselves is because, tax-wise, this is the most advantageous way of taking equity out of the company they have been nurturing all these years.

& what will they do with their mega-payment? clearly, the brothers have not wanted to re-invest the capital back into aastra itself. No acquisitions, no mega-plans for growth. Instead, core & hollow out a quarter of the company.

i haven't even looked at the financial statements yet. I've hardly begun the DD. I might not go much further, because already i'm getting too much of a sense of a lovely private plaything which the Shens have enjoyed all these years ... but now they're leaving ... gracefully slipping sideways into that good night ... with a parting gift to shareholders so generous the investors won't complain ... adieu sweet company ...

http://www.aastra.com/investor-relations_2732.htm


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## humble_pie (Jun 7, 2009)

greyhound & m3s i have no stake in this but i tend to believe that - if you're still holding - you won't get the dividend ...

better double-check, i'm just a dumb crumb

(crumb talking to itself) in tax-free accounts, why not sell now & re-buy at low price after the royal baby is born?
(crumb replies) what would you know, you're not even british


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## m3s (Apr 3, 2010)

humble_pie said:


> aastra is an interesting little-known story, but there are some heavy negatives.
> 
> the founder-entrepreneurs are a pair of brothers who are still at the helm. One holds a masters in engineering science from the U of T.


Yes p.eng bachelor and masters in aerospace engineering. That explains the name Aastra.. astra is an endearing latin word in military aviation (stars). They probably thought it wise to change sectors as the iron curtain came down.

He claims they were the biggest provider of caller ID in the 90's. Potential growth in the transition from PBX to VoIP is what I was playing on. VoIP in the military was a huge success and acquiring that spin off from EADS seems bright.

But ya, I was already leaning to sell it with such a jump. I see the Shen brother are 53 and 55.


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## humble_pie (Jun 7, 2009)

m3s said:


> Potential growth in the transition from PBX to VoIP is what I was playing on. VoIP in the military was a huge success and acquiring that spin off from EADS seems bright



yea there are few worthwhile commentaries on this company but this insight is the best i've seen, good for you.

still, one has to ask oneself, Why. Are. The. Brothers. Pulling. So. Much. Out.

sometimes, born-in-the-blood-bred-in-the-bones entrepreneurs never lose their desire to start up the next new thing. The Shens may have decided to take out a big chunk of capital because they've already identified where they want to move on.

i'm still not straight about the dividend. It must be because i'm not british. Stock flew past its ex-distribution date yesterday - when dividend rights were scheduled to transfer to buyers - but stock is holding firm, so that theory goes ad astra.


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## Greyhound86 (Feb 21, 2010)

Thanks for the posts regarding this Humble. Maybe we will sell now and perhaps buy back later.


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## humble_pie (Jun 7, 2009)

Greyhound86 said:


> Thanks for the posts regarding this Humble. Maybe we will sell now and perhaps buy back later.



grey i hope you realize i was being a tad frivolous, i'm not pregnant ...

ok i'll be serious now. The link i quoted above is to the company's own news release announcing the monster dividend.

i find this news release misleading, although probably not on purpose but rather due to careless drafting. The first 2 sentences in particular are giving some shareholders the notion that stock trades without its dividend as of yesterday, 1 august/13. But this is not the case.

here is a crucial paragraph, which is about as clear as mud:

_Because the amount of the Special Dividend announced today represents a distribution of greater than 25% of the market capitalization of the Company as of the close of markets today, the Toronto Stock Exchange has required that the Common Shares shall trade on a “Due Bill” basis from August 1, 2013 until the close of trading on the Payment Date. This means that sellers of Common Shares during this period (i.e. sellers in trades settled after the Record Date and entered into on or before the Payment Date) shall also sell their entitlement to the Special Dividend to the respective purchasers of such Common Shares. The Common Shares will commence trading on an ex-distribution basis (i.e. without an attached “Due Bill” entitlement to the Special Dividend) from the opening of trading on August 19, 2013 (i.e. the next trading day after the Payment Date)._

situation is opaque enough that i'm going to totally stand aside (as a non-shareholder who was scrounging around looking for dividend play opportunities.) But i do beg of you to verify your dividend X & record dates - with the company if necessary - & please do not lose your dividend, either as dividend or as capital gain to be taken soon.


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## m3s (Apr 3, 2010)

humble_pie said:


> The Common Shares will commence trading on an ex-distribution basis (i.e. without an attached “Due Bill” entitlement to the Special Dividend) from the opening of trading on August 19, 2013


So it's up almost exactly $7.2 and that ends on Monday

I'm thinking I can keep the divvy and salvage some of this built-in price by selling first thing Monday. I'm not a day trader... so I guess I'll have to use a stop loss. We'll see how that works out.. the current bid is only 5 shares. I'll be in town during the open so maybe I can use the mobile app


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## humble_pie (Jun 7, 2009)

good luck m3 but somehow i don't expect you'll be able to sell in the $25-26 range para la manana. 

me, i don't understand the due bill dividend process exactly but i'd bet the farm the pro traders do. Every arbitrage opportunity has already been scooped up, nailed down, hurricane-proofed.

i lost interest early in aastra because it seemed that the Shen brothers, though highly talented, are profoundly private & anti-crowd entrepreneurs. They don't seem to be willing to communicate in a manner i would consider adequate with their public shareholders. In particular i found their news release upthread to be badly worded, therefore starkly misleading.

taking a company public is perhaps not the best way for such independent entrepreneurs to go. They might be better off sticking to the venture capital stage ... although they would have benefited from crowd-sourced capital when they did take aastra public years ago.

here's a worst case scenario for aastra: we know that the brothers are definitely taking their money out, we know they have a history of switching their entrepreneurial focus & re-inventing AAH from the ground up.

at their ages - mid-50s - the Shens still have plenty of time & energy for the Next Big Thing. Suppose they have already identified the NBT. Suppose that recently they have been trying to drive aastra itself towards the NBT. Suppose the financial backers said Nyet. Suppose the brothers then said, OK we'll take our own money out of Aastra & drive over there by ourselves, founding a new venture enterprise as we go.

if that's the scenario, it would leave aastra without most of its creative leadership.


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## m3s (Apr 3, 2010)

+10,000kms and I only noticed 1 Canadian logo












humble_pie said:


> good luck m3 but somehow i don't expect you'll be able to sell in the $25-26 range para la manana.


Yea it dropped instantly on the open. I'm out now at 52 week high I think (if you don't count the inflated divvy price)


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## humble_pie (Jun 7, 2009)

.
per aspera ad astra
.


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## Greyhound86 (Feb 21, 2010)

AAH is up 26% this morning.


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## humble_pie (Jun 7, 2009)

buy why?


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## Spudd (Oct 11, 2011)

Earnings were good.


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## Greyhound86 (Feb 21, 2010)

From Wall Street Journal: "Aastra Technologies Ltd.AAH.T +28.29% said its third-quarter profit jumped to 47 Canadian cents a share from 6 Canadian cents. Revenue edged up about 2%."

Volume only 28,000 shares so far today.


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## doctrine (Sep 30, 2011)

Well done to anyone that held this through the special dividend. Not only did you get a massive 35% dividend but you now have all of your capital gains back. Total volume was in excess of 110,000 shares so that is quite significant (1% of the total shares and more than 25 times average volume).


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## m3s (Apr 3, 2010)

Well it was a good one, I just sold a day early :witless::witless: Held for nearly 3 years of just divvies so thought it time to take a decent annualized return. On to the next!

HP has been bragging lately about working with Aastra, and I had a distaste about mingling with such endangered species.


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## HaroldCrump (Jun 10, 2009)

Buyout !
Congratulations to those that were holding.


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> Buyout !
> Congratulations to those that were holding.



oh i don't know
look at the terms of the buyout

only $6.52 US per share plus 3.6 mitel common shares
so everything really depends on the market fortunes of mitel.

one thing for sure, the Shen brothers are long gone, per upthread ...

PS for those who don't like being charged unnecessary FX fees by their brokers, all long holders of AAH who tender to the mitel deal are going to receive that $6.52 cash in US dollars. In other words, if you're holding aastra in a canadian account - which you undoubtedly are - your broker is going to sneakily charge you 1.50% as FX currency conversion fees when the cash payment for your aastra shares arrives.

the same thing happened when CNOOC of china bought Nexen of canada. CNOOC paid in USD.

the solution? scoot your aastra shares over into your US investment account; or confirm with broker that they're being held in the USD side of the account; or create a USD account if you don't have one already.

if it were myself, i'd wait a number of days, though, in case a rival bidder appears, one that wants to pay in canadian dollars. If a rival all-CAD deal would be better, then investor would want to keep his aastra shares in canadian account ...


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## Greyhound86 (Feb 21, 2010)

Thanks for pointing that out Humble.

We decided just to sell our shares today (Tues) at $33.70 rather than wait for the merger.


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## humble_pie (Jun 7, 2009)

greyhound i am so happy for you!

but if mitel goes to $10-12-15/share after this, i sincerely hope that you will continue to speak to me!

me i will try to keep an eye on what the Shens turn their hands to next. Whatever it will be might be an interesting investment.

both brothers are serving with the new merged corporation - one as a kind of strategic planning consultant - but i don't know whether these are temporary figurehead positions that will eventually be phased out or what.


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## m3s (Apr 3, 2010)

Well played! If I didn't sell before the quarterly, I surely would have sold after that 2nd bump. Somebody is going to profit huge on VoIP, but I'm not sure who yet. Maybe Mitel is the next Nortel/RIM yet to boom.

MIke and TErry's Lawnmowers?... :tongue-new:


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## humble_pie (Jun 7, 2009)

am i reading this right? that price north of $33 means market is anticipating another buy offer for aastra?

deal price was something like 6.52 USD in cash plus 3.6 shares of mitel which was trading around 7.70 today? that hefty premium usually means market thinks another buyer is going to pop out of the woodwork ...

MI & TE are alive & well & still living in ottawa & wales except that it's not lawnmowers now, it's probably more like wheelchairs, also i don't believe cowpland was ever in this new version of mitel each:

PS if it's any comfort to m3s the Shens themselves sold far too soon. Can u find insider trading reports? The brothers sold a huge bunch of shares even before they announced the mother of all dividends.

the dividend strategy was to get their own money out, so obviously the brothers had no clue about the mitel buyout/merger while the divvy project was being carried out. Perhaps they had been trying to sell for some time but were not succeeding, so they turned next to the mother of all, etc.


EDIT _one day later:_ Oops my bad. There is no premium in share price. So sorry. Market seems to have fallen in love w Mitel which is powering the settlement value higher.

is market falling for voip here? i didn't think so ... maybe falling for cloud technology, though. Aastra's is called ClearSpan. The folks at AAH seem excited about it, they were saying that the US postal service has leased clearSpan but i don't really see other news confirming this ...


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## humble_pie (Jun 7, 2009)

m3s said:


> If I didn't sell before the quarterly, I surely would have sold after that 2nd bump.


forensic journalism is so fun. Looking back, it's clear that they (the brothers) would never have undergone all the trouble & expense of the special dividend if new buyer Mitel had already been in the gun sights. Instead the Shens would have just sat back & waited for the buyout proceeds to arrive.

so that 2nd bump in share price, not long after the mother of all dividends had been paid out & share price had sunk back to pre-div levels ... that 2nd bump was due to leaks or insider trading over the as-yet unannounced buyout.


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