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The people being "realistic" now were the people being optimistic a month ago, letting their emotions affect how they trade. I'm not saying it will go one way of the other, I'm just saying don't make decisions based on emotions or off disingenuous posts on here.
I have been impressed with WAM on this board. He made the call of 80p and he/she virtually hit it. I didn't think it would get there.
But surely SP is more or less at the floor now, and there is value here. The logic of October 7th all small PIs will sell their shares en masse because they thought a RI would make them rich, crashing the SP, is a real stretch of the imagination paddy. People who have made enough money to invest in significant amounts surely wouldn't be that stupid.
It may drop a little, but this must be the worse time to sell. AZ rolling assessment by European regulators of their vaccine and rapid testing starying at Heathrow, potentially opening up some routes to america, will surely have some upward pressure in the next couple week's.
SP should fall to RI price today if it is confirmed that RI has not been fully subscribed.
Paddy,
Stating the share will take a tanking on the 7th on the basis 'PIs will want to sell sell sell' to use money for other stocks is;
1. Untrue. If the PIs that bought in hoping to make a quick buck in relation to the RI price (which I highly doubt as they're not that stupid) then they're not going to simply uplift their leftover funds and walk away from these 'losses' you keep barking on about.
2. On the basis of point 1, say the PIs did sell any shares to back up your thought process, don't you think some of the sharks that held off for the RI will pick them up to then make a mid-long term hold or a profitable trade when news hits? Or even the original SHs loking to average down even more?
The RI has now been concluded, the tanking is complete. It's been a sore one but expected when a large RI like that has taken place, hence the bottom at 90p-ish. (circa 80% down)
When the news is right, the SP for every airline will fly quicker than we will know creating a massive upside to be gained, whether you've averaged down, taken up you rights or bought in fresh at the 90p bottom.
In my view, its coming and people that are sitting talking and waiting for "30p" a share and the company going bust are missing the opportunity as 90p for a blue chip stock such as IAG is ridiculously cheap. For note, that's not me trying to coax people in to buying, in fact, i hope the people that have been slaughtering the stock and forcing influencing new investors to sell miss the boat completely and if they are short, get burned badly.
Agreed most people on here shouldn’t be giving advice. Anyone talking about making quick money on an RI clearly don’t know what they’re talking about.
You only have to look at their posts on other bbs to see how little they actually know about anything. Don’t make your trades based on what people are saying on here.
Certain people were saying IAG were a cert for a profit a month ago, then since crystallising their losses have changed their tune over night.
Make your own mind up, do not listen to anyone on here.
Anyone & everyone who was a pre rights issue holder & stayed in this share has to be deeply underwater in losses whether they took up their rights or not. Strangely enough there aren't many posters on here that i remember from back in June time except resident Messy!
Some people on here shouldn't be investing, let alone posting advice on a BB. There was no quick profit in a rights issue. The supposed upside of the new shares is counterbalance by the reduced price of existing shares. Hence 131 equilibrium. Any investor selling at that point wouldn't make a profit. This has dropped below that level now, so anyone selling who took up their allocation is making a loss. There's no difference between new or old shares.
Both PB and boix have a point but it is conjecture at the moment as no one knows how much overhang or stretched PI's there are out there. Added to that C19 market volatility and anything can go T**s Up! As posted previously i was flying out to Cape Town on BA tomorrow, SA government just put restrictions on pax from the UK to SA, flight might get cancelled might not but for sure there will be less passengers so the airlines need an 'approved and agreed testing mechanism accepted between countries, until that time IAG is at the merci of sudden changes in rules...I hope the shares dont tank, but if they do around the 7th I will invest more. (90p might not be the bottom that depends on the factors above) but if it is like many others, I've just lost the opportunity to make a fat profit....! thank you for making interesting points, def food for thought! now wheres my G&T!
A lot of those investors were looking to sell at 130+ for an immediate profit. simple as that!
yes Bull i do. If you've got in front of you what looks like a cast iron return of 40-50p on a share of 84p in a matter of 2-3 weeks i believe people will have overstretched themselves to buy into that golden unmissable opportunity. What could possibly go wrong? errr, the SP could tank by 40% in the intervening period. Which it has!
That’s a stretch, do you actually believe there’s a meaningful number of investors out there that would put the entirety of their savings into a travel stock during an international pandemic? And then leave themselves in a position so cash strapped they’d have to sell within a couple of weeks? If so they’d be better off paying someone to invest for them.
Does Odey have a short interest in IAG. Eager to know.
The issue with next week is that lots & lots of PIs will have bought RI shares when they saw the TERP @134 & saw 50p per share easy profit no brainer lets invest as much as possible!! Reality will now have dawned & all savings/spare cash have been tied up here. No profits & hey i need this money for other things. Sell, sell, sell. That's what happens next week!
I see some form of semi normality by Christmas early 2021. Flights will resume for certain by Easter and the rush to travel will be unprecedented. Any further dilution is nonsense life will go on and IAG will start making a profit again. The current volatility will go and is merely creating opportunities to average down. The stock is currently shorted as indicated by the rapid drop and sooner or later these will need to be closed off. Check out BP and HSBC who on earth predicted 25 year lows. The whole market will make a comeback along with IAG. Patience for now
7th October - new shares issued, rights issue proceeds of £2.5bn on IAG balance sheet, this isn’t difficult to follow. There will be NO dilution on 7th. If the markets are positive in IAG in 7th and going forward SP will rise, if market is bearish on IAG then SP will fall. In either case this has nothing to do with new shares being issued in 7th.
Lastly, £10bn rights issue more appropriate - are you being serious??
This share will be turbulent for a while and move swiftly lon sentiment however doesn’t need people scaremongering on share dilution when that is clearly not accurate.
I don’t understand, the SP could drop next week, but it will be dependant on the market, not a manual adjustment from the RI.
There is no “a mix of both” - the terms of the RI were stated, people who bought in, bought in. Any spares are bought by the underwriters as stated. The terms are outlined and that’s what happened.
Anything different would be illegal. There’s no in between, it’s not the play ground. There’s strict financial laws.
Interesting because the graph doesn't suggest that. The price hasn't adjusted down to 60p levels for year lows in adjusted charts.
I dont really rate the rights, at the speed IAG burn cash you really needed £10bn+ rights issue.
Time will tell. If I called it wrong I'll hold my hands up and accept it. Lets say Friday next week.
If you’ve invested time researching, you must have misunderstood something along the way.
1) will they mark the shares down to equal a 1.8bn market cap? - no, the share prices was lowered to account for the RI 14/09. The TERP was ~134p, since then, it’s the SP has kept going down. But there will be no more adjustments to the SP from this RI. The SP will fluctuate according to the market.
2) is that priced in already? So the the market cap rises, but the shares trade the same price. - Yes, this is exactly what will happen on Monday. The SP will move according to the market. No manual adjustments of the price.
3) a mixture if both. - no, read above
I am following the stock. I've invested a lot of time reviewing accounts and doing the calculations. I'm keen to buy in at the right price. Even it I consider the shates a big gamble, rathervtgan a solid hold.
I've note provided advice, simple suggested 3 opinions the sgares could go post 7th oct. Although I highy recommend investors review cash, debt and cash burn in the only real available data 30th June results.
I wish investors well I truly do, just be aware if the high level risk. I'll be watching on Wednesday 7th good luck.
Rick, you really shouldn’t be giving advice on this board if you haven’t bothered to follow the stock.
I don’t know what will happen next Monday in terms of the SP, but you clearly haven’t been following if they’re the 3 options you’re outlining.
Please do some research
hi Hampstead boy. Because the dilution officially takes effect on 7th Oct, and the new shares become "tradable" that day.
Remember you moving from 2 billion shares to 5 billion "tradable" shares instantly that day. I'm not entirely sure how the market will react to that. 1) will they mark the shares down to equal a 1.8bn market cap? 2) is that priced in already? So the the market cap rises, but the shares trade the same price. 3) a mixture if both.
I suspect at least option 3, which is not bright.
Personally i'd be very nervous if I owned IAG until post 7th Oct. Even if you get through that unscathed, you've got trading update on 30th oct. No matter how upbeat people feel about vaccines and 2021, the market will react to "current events", cash burn, current sales and shareholder equity. It seriously is a scary time. Even after the rights issue, share holder equity cant more greater than 3bn.
Noe compare that with say lloyds or natwest who's shares are trading less than "half" of shareholder equity. Plus they have huge capital reserves to weather the storm. Iag burned its reserve in less 6 months.
Even if fights have picked up, my question would be; what is the hangover cost from 1st July until now (end of lhalf yearc esults). I suspect its not nice and very expensive.
I'm interest in IAG when the price reflects what I think its worth. Around 50p. Please review half year accounts, to see how scary the position is.
Rick (I own 125,000 lloyds, 3,100 natwest) no airlines yet.
Anyone who thinks 90p is the bottom for this share will get a wake up call next week. I was invested in this stock at £2.40 & watched it dip right down to £1.55 pre RI. These little 5% fallacy delusive days are nothing new. All on promises/hopes of vaccines/tests etc which never come to anything. Today's 4p rise will be a 20-30p drop next week!
I agree with sunsurfer.
Next litmus test is definitely the 7th Oct.
Probably in for some turbulence then till the 30th.
Could be a watershed moment.
I've kept some powder dry and will buy back in after that if 'things' go well and add to my investment here.
GLA
Chugernaut's previous post V2 is correct, SP increase due announcement of possible Covid testing at airports, yet to be cleared by governments. I think we just saw the bottom unless there is massive dumping of shares on 7th...
Bull is also correct, IAG no longer burning 200m /week, now less than 14m/day.
Fuel no longer hedged fo 12 months....
30th Oct will show a higher loss due to one off's like VR etc so if 7th isn't a massive dump, i'm buying back in! (and i'm already in by 28.5k!)
I thought he was wrongly or misleadingly trying to suggest that there would be a further dilution of the SP at that point ignoring the facts that the new shares to be issued result in £2.5bn funds flowing
into the business