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RR was £792 pre covid. Still a mega bargain!!
If the share price hits £1.50 next year, that’s equivalent to £5.43 now, so a more than doubling of the current SP and why I’ll be taking up my full rights.
I won't be surprised to see this head towards 2.50 before the close of play.
Even if this hits around £1.50 at some point next year then you are better off financially approaching that figure with a larger holding.
I mean the fact we are rising today is a clear indicator a positive sign.
At the end of the day, if you are a current holder of RR then it is beneficial to you to take up the Rights issue if you think this will improve, as you will have more cash exposure more shares but equally a bigger potential gain. If you seriously think it will tank further after the issue then don't buy them. Follow your instinct.
I'm not trying to imply that selling your rights is going to crystalise a gain (it may or it may not, depending on where you bought RR. recently) but it does compensate you for the reduced stake you'll have in the company. It compensates you at a fair price ,commensurate with the RR. share price at the time. If you think RR. are going to rise after the rights issue is done & dusted then you may wish to take up the rights, just don't be tempted to take them up simply because of the headline 32p. The rights could be done at any price, it would make no difference to an investor taking them up in full.
Selling your rights, seems like you are getting some money back (as a gain) but you are not, your not being given anything and don't be fooled into thinking you are, your just receiving back some of your initial outlay.
If RR. end up trading at 85p ex-rights that means the nil paid rights shares will be worth 53p. Therefore for every right you take up at 32p you are saying goodnight Vienna to selling for 53p.
It's fine if you think RR. are a good investment. Please don't buy because you think the rights are cheap and only costing you 32p.
I agree, sure we will end up around 85p? post issue but can definately see these much higher next year. I'm loading up in an ISA as can see a big gain here, hence the rise today, people are getting on board as they can see the bigger picture.
The word 'diluted' is very emotive and tends to used by those wanting to encourage you to part with your money.
If you don't take up the rights you receive money back. In the case of the RR. rights it's likely to be 60%-70% of the value of your holding. In effect you've elected to sell part of your stake in the company. It's quite possible you can find more attractive invetsment for the money. Put that way, it doesn't sound as bad as 'dilution', does it?
Yes, if you don't exercise the rights in full you'll end up holding a smaller percentage of the company than you did before. So what? Please explain why your pecentage holding the the company is such a big deal to you. I doubt many PIs know what percentage of the company they're holding anyway!
Selling now is a shortsighted view in my book. This is the time to buy corona impacted stocks, vaccine news will start arriving from multiple places and you will be left wondering why did I sell. If you are happy with your profit, good luck. I think RR will go all the way to 400p on vaccine news. Rights issue is just a bonus for long term hold.
If you take up all the rights issue shares then your position doesn't change at all, (more shares more outlay but percentage wise you will be the same ammount down or up. If you don't take up the offer then you will be hugely diluted.
I'm out this morning got my money back these shares are going to drop even if people take up the rights they will still be at a lose for a while
Re Tail swallowing
On or shortly after 28th you'll receive your rights allocation. These will be in the form of additional nil paid rights shares. You'll be able to sell these shares on the market, just like any other shares. Alternatively, if you prefer you can pay 32p be nil paid rights share to convert them to full paid RR. (if you do this, you forgo the cash you could have received by selling the nil paid shares).
If you want, you can sell some of your nil paid shares to fund exercising the rights in the others. this is tail swallowing. You might want to do this in an ISA, if it's already fully funded this year.
There's a simple formula you can use to work out how many shares you need to sell to fund taking up the remainder. In the case of the RR. rights it's:-
32 * Number of rights shares / RR. price ex-rights (i.e. on or after 28th)
Thanks all!
When will I be able to Sell these rights and then put it towards my other discounted rights?
For every 3 RR shares you hold you can buy 10 more at 32p.
Say for calculation purpose your holding is 300, that entitles you to buy 1000 new shares , next week you will see an entry on your account which will look something like "NIL-PAID rights 1000" priced at about 40p . They are your "shares " to do with as you like you can use them as a token to buy 1000 new shares at 32p each , or sell them all to add £400 to your account , or sell say , 400 of them to earn £160 which you then use towards the purchase of the other 600 rights (cost £192) . Actual cost to you £32.
You can play around with the numbers any way you like on the same basis.
Caution check the arithmetic, it's early in the morning and I'm only on my first cup of coffee!
Calculating how many of your existing shares you would need to sell in order to buy an ammount of rights offer shares.
Can someone evaluate on Tail Swallowing please?
Thanks in Advance.