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SF - you actually don't miss out on the 'discount' whichever option you take. For example if the SP at the time you exercised the option was 600p you were choosing between a 190p discount or 190p to sell the options. The word discount though is a bit misleading as the discount in the new shares is offset by the reduction in value of the old shares - you're not unfortunately getting something for nothing or any kind of bargain. But some do see it this way and will, I agree, very likely sell.
SF, i bought into the shares afterthe RI because prices are always depressed on announcement and generally recover a few weeks later. I also thought the government would ease travel restrictions , which they did giving a further lift. We have another 5 % at least increase from here imv and the factors I will then watch for are; restrictions, airport problems, oil prices and all the other travel 'worries' which may limit further upside or indeed suppress the price. Just now I remain confidently long. We shall see what happens.
I'd have thought most of the people buying into the RI only did so so as to not miss out on the discount, doubt too many wanted to increase their holdings otherwise, so it'd make sense they'd now want to sell to lock in any profit and release their funds back. Restrictions have eased but now's not really peak flying season so wouldn't expect any massive increase in customers.
I make my living trading on sports price movements so share trading isn't my forte just looking to branch out. I did consider going in at around the 606 mark but missed that boat on Friday mainly cos I wasn't sure of the rights issue mechanics. For me I can't see any massive upshot now and more of a 50/50 if it'll bounce back.
There will probably be some temporary selling pressure when people are able to trade their new shares, especially with the sp holding up so well despite the RI (not because of it) and it looking like such a quick and chunky profit since those shares were purchased at just 410p.
In reality the profit is not that large but the fact that the price is now above the theoretical ex-rights price (of 638p) at all is impressive and surprising - due mainly I guess to the easing of travel restrictions and some takeover speculation. Not so sure how much credibility the takeover rumours have but the easing of restrictions are hopefully here to stay (and will be relaxed further) and with a much stronger balance sheet now EZJ should be in a better position than they were to take advantage.
Other factors cone into play the opening up of sky's after the pandemic and the fact the market is more interested in the future and what profits can be made take a look at other companies in the sector ie RYA like the stock market when its down most companies tend to fall as well as when the dow is up it tends to spread over here so there's know reason why this share should not do well in the future good luck to all EZJ investors.
Surely once the new shares are in circulation these small bounces are going to reverse, seems the rally has been based on very little other than the RI. I wouldn't want to be a buyer right now on the vain hope of a takeover.
Smithy i don't know what camp you fall into but it's certainly not the profit one. Thought you was going to tells us?about your next short still waiting for that one like any good liar you have to have a good memory !
Smithy my strategy over the years has more than made me money I am happy with my trading but do not try to talk down EZJ only wishing investors make money and not trying to rub investors nose in it .whilst they go up I make money on the occasion they drop other investors can do their own thing and make money so there is plenty in the pot for everyone but having read your post your hell bent on EZJ going bust never mind putting employees futures in doubt as long as Smithy thinks he's right then maybe its OK.
No need to explain , found an article showing the rights issue only added another 300M shares not the 700+ in circulation and the company was only worth £3.6B pre rights issue.
Maddamax,
So to be clear, I have two EZJ shares listed in my stock holdings now, EZJ and EZJf, I assume these two will merge next week and become the 'normal' EZJ share and so average out the book cost? Thanks
Smithy you do not mention the loss you make when you short this share and they rise you must think we are stupid to believe all you do is make a profit if that the case we would all be doing it shorting a share is one of the most dangerous things you can do and the cost to trade must be included in this before you even make a profit.
Fyi,It has decreased the SP and has diluted the number of shares in issue by another 65%.Next week the new shares will trade together with the old shares and number in issue should be 750m or thereabouts.
Can someone explain why the rights issue hasn't decreased the SP as I assume these are newly issued shares , rather than issued shares the company already hold, thus should be diluting the price of the shares in circulation. Or is it simply the company now has X amount of cash extra on the companies books. New at share trading so only asking out of ignorance
This forum is very entertaining but the thing I love most is posts like this. Really made me laugh mate thanks.
I've been watching and am thinking about a short too. This piece from DanVanDamme on one of the other boards raises an interesting perspective: "The price action here is fascinating. Immediately prior to the last rights issue in June 2020, the number of EZJ shares was approx 377,347,727. After this latest rights issue, the number will be 738,149,619 - almost double the number of shares in January 2020 BEFORE covid hit and when EZJ's shareprice peaked at around £15. Halving that pre-covid shareprice to reflect twice as many shares in issue would give us 750p. We are at 680p, essentially less than 10% below the peak in January 2020, which was also before EZJ took on a huge amount of debt and spent assets on redundancy, mothballing etc and before the travel market took any kind of systemic hit (such as business travellers not travelling so much because of a permanent change in behaviours by switching to video-conferencing instead of in-person meetings). That is an amazing recovery, especially when you consider that travel has not actually resumed to anything like the previous level of business. I doubt that the shareprice is sustainable at this level, and it might even be termed 'irrational exuberance'. "
smithy. The only person that believes a word you say is yourself.
Smithy well done on your profit.
My point is that you said EZJ is doomed as no-one wants to travel anymore and this will be 500 again yet you then closed your short. This means you think EZJ will rise again which is in complete conflict to what you have told ppl for months on end.
I think the sp rising is not caused by the RI overhang but Smithy closing his short, again, and going long. Expecting confirmation shortly.
:) £5
I will be adding too. In the meanwhile I will trade the breaks.
Seems the travel stocks have refreshed today as each week that goes by is another improvement over last year.
TUI SAGA EZJ JET2 OTB SSP - the recent drops have been dips only, so for now travel looks to be bid up in the absense of news.
Keep an eye on TUI - it is heading to £4 imo, although I have only a small holding here. I see RR. is through the 130p as I type
Smithy
Yep.
Doing the same in effect, not shorting but reducing on the spikes and buying back lower - average heading down with each successful trade, I will let you know when I get to £0 average which is my intention with EZJ.
Expecting £7 as the RI overhang goes, may reduce around 730 but this one is on a rising trend imo.
Not a recommendation. DYOR.
Taverham I have asked why Smithy closed his short position twice and had no answer either. Also mysteriously both my posts asking this question have disappeared is this what happens when someone reports your post?
Mary, I will wait for advice from Smithy. I asked whether we should go long or short at this price and seem to have missed his answer. If I hear nothing I will stay long and wait for the sub £5 buy in price he predicted before adding. Nor sure how long I am going to live but it might be a long wait.
IAG not going ahead with plans for a low cost carrier at LGW.
this should be beneficial for EZJ
I am still anticipating further bids for EZJ possibly even an agreement with IAG, which must now be on the cards.
Of course ups days down days are normal.
Rights issue out of the way should support the share price.
Many will sell rights if they do not have spare funds.
Think that all stops today.
I will buy at 580 and reduce 800 and many trades in between.
GLA
wht u think sp coming more down ??