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It looks like you did well there fahmad, selling RR. at 100p and RRN at 68p this morning.
I fear some are inexperienced with rights issues and are wedded by the prospect of these "cheap" 32p shares. Had you taken up the rights at 32p you'd have missed out on selling them at 68p - i.e. an overall cost to you of 100p.
If you want to maintain your investment you can always buy the shares back lower now. Hopefully it's plain for people to see how taking up the rights isn't really cheaper than simply buying the normal RR. shares in the market.
For those who feel locked in because the rights haven't been credited to your account (this is quite normal with share accounts as opposed to CFD/spreads) you could always consider locking in your gains with some evil shorting. Sorry, possibly should have suggested it earlier!
Sold mine at 100p. Including the new 10 for 3 rights. HL let me do it in my account without buying the rights. Instead rights were sold at 0.68p per right and original shares at 100p that were bought at 320p. Maths below
Bought 10000 shares at 320p few months back = £32000
Sold 10000 shares at 100p today = £10000
10 for 3 sold today at 0.68 (100p - 32p) without buying = 33333 * 0.68 = £22666
Total money received = 10000 + 22666 = £32666
I was in huge loss few days back. Thanks to Rolls Royce brilliant trick of Rights issue. I am now £600 in profit.
It may go up more but not getting greedy here. Instead feeling extremely lucky to get out safe and sound.
If it's averages you're worried about:-
Say you bought RR. yesterday at 230p
You sell your RRN rights today at 64p.
The average cost of your RR. shares is now 17p. Not too bad eh?
Taking up the rights is not the only way to get your average down!
Intothedeep, if you held at close last night you don't 'buy' the rights. You receive them free of charge (actually, you pay for them in the drop in the RR. share price).
If you want you can sell them. If you sell RRN for 64p that reduces your investment cost in Rolls-Royce by 213p per share.
You don't have to excercise the rights in order to get your average cost down. That will happen anyway, if you sell the rights or let them lapse and receive the lapsed proceeds.
You have to but the RI shares at 32p to then not affect your overall average
Just in case some people haven't realised yet, instead of exercising your rights you could sell them. As I type you could get about 64p for them (they'll track about 32p below RR.). As you've received 3.3333 rights shares per exiting RR. share, that means you could sell them and get back 213p of the cost of your RR. shares.
Or you could say goodbye to that money, add another 106.7p on top and convert the rights to 3.3333 fully paid RR. shares. Your choice.
AMAZING! THANKS GUYS FOR CLARIFYING, i had such a BIG PANIC this morning!
Rolls Royce announced the rights issue of 10 new shares for every 3 existing shares held at a price of 32p each.
This price is a discount of 41.4% on the theoretical ex-rights price of 54.6 per ordinary share.
This price is based on the Closing Price of 130 pence per Existing Ordinary Share on 30 September 2020
What does this mean for you?
If you are an eligible shareholder in line with the event terms, the Nil Paid Rights will be allocated to your account as soon as practical from 28 October 2020.
They go Ex-rights on this day (today)
That is your original holding. You need to check in on your nil rights. Decide if you are taking them. As of this moment my HL offers over 60p for my nil shares. If you take them up yourself at 32p Your overall % value will be better.
Because once you take up your rights it will average out. If you have no intention of taking up your rights you should have sold your holding by now....
Hi if u say the value hasn;t gone down, but in reality I am at a loss of 60% why is this? sorry I am a noob to rights issue
Are getting this wrong. It has not dropped from yesterdays close OF 219 straight to 75p from open. It is the value after dilution!!!. It is the same value in %!!!. It will also not go to 32p because this value was given to current shareholders in order for their share to be of the same value after diluting. The share value after will still be the same for all other investors. The 32p is not the share value after the rights. It is to help to keep the older holders % VALUE.