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If your an Institution & you've lent your stock to someone else for a period of time are you going to risk selling it ahead of the share consolidation or even just after that knowing that at least 3 other institutions are long by 19.5% of the company ?
Add in there are 3 small shorts out there for around 2% of the company, so they've borrowed stock to sell as well & may need to buy it back in a hurry as well
And to top it off the company buy-back is about to begin again for another $10M or so which will be competing as well while buying up possibly 4% of the company.
Given the above I've removed the sell orders I had in place around the £1.81 mark which has been the sort of recent cap on the price.
I have a feeling this is going to get squeezed much high in the next few days, its a pity I only got 2.5K of my last sale bought back around £1.71 & I missed out on more early Friday :(
Lets see if I right & how panicky the institutions get this week.
LOTM
@LOTM, High volume, followed by down trend to announcement, then on the day price is above inflection point, now the price is moving higher ?
https://invst.ly/11hdye
Makes you think
Institutions, crafty lot...
Take a look at the share price and trend before the announcement of Divi & Consolidation..
https://invst.ly/11hda7
With all of the commitments made by new management we should be ok here for the future.
I think a couple of things will happen:
1. next years revenues will exceed operating cost , thus causing a profit which will be passed
on to shareholders via dividend. (we were promised significant fat cutting).
2. with the right sizing and sleek operations, it may be ripe to be sold/ acquired/ merger,
which hopefully will significantly increase the share price, and be an out for some of us.
We have an operations call in Nov, but I think March / Q of next year will be a better indicator
of whats to unfold. Not sure how falling from the FTSE 250, to small cap will effect things, but this is really just based on market cap (shares available on the open market).
But any well tuned, fine running company will be prime to be purchased , by a larger entity.
What exactly would attract small private investors to this company?
Its exciting prospects? Income? Growth? Performance? Returns on Investment?
It has taken years for a partial return from Modis Billion dollars.
The fact that only the Institutions will invest is indicative of the lack of prospects.
The remnants of the Billion is the only attraction left.
Pass me a voting form please.
There is now a further announcement regarding institutional holdings in Capricorn -
A new name has just emerged Centiva Capital, LP They have acquired the indirect voting rights to just over 3% of the company !
I'm actually beginning to wonder how many voting rights Capricorn has !
Yes I know it can only be 100% but seriously that is 3 company's that have acquired significant indirect voting rights in the company. The latest indirect notifications have
Goldman Sachs - 6.3389% see announcement 19th Sept
Bank of America Merrill Lynch - 10.187% see announcement 5th Sept
Centiva Capital, LP - 3.05% see announcement 22nd Sept
So combined there indirect control is just over 19.5% of the company.
So who has sold them there actual shares ?
Well it has to be at least 3 different institutions !
LOTM
Ive been following this share for quite a while hoping to get in at the right time. As I believe that there will be a time when the share is under valued and will be paying a fare div. This timing will prob be after CNE pay the div and then the large institutions sell out of the share.
I would buy before the Div but usually the Div payment amounts to the drop in SP value or worse.
Johnnytaffia,
You've chosen a comparison that most people can relate to. Your 100% right that its a drop down in terms of size & status, so definitely not progress by those measurements.
The only counter comment I can give is that its only the very few elite football clubs in the world that actually make money for there owners over time. All the others lose it. In football clubs its the players & managers who get the money in massive salaries.
People invest in football clubs because of there love / affiliation to the club, not to make money from doing so. Most invest knowing they'll never see that money again & yes I own a few shares in the club I support & no its not in the premier league.
So comparing a football club with something that your investing in to make money from unfortunately is not a good comparison.
LOTM
This was a FTSE 100 company in the dim and distant. Don' see how relegation is step forward. I mean, if this was a football club we would have gone from Premier League to Division 2. Progress?
GrumpusLOL
Clearly we see the future of Capricorn differently.
Capricorn was a FTSE250 company and as such had a heavy bias towards institutional shareholders owning most of the company. These special dividends are dramatically reducing the market cap of the company. It won't even be a FTSE350 stock after this latest payout, which means a lot of Institutional investors will no longer find the company meeting their size criteria & will have to either reduce there holding further or sell out. Yes the same thing happened after the $450M payout.
Yes in the short-term the same thing is quite likely to re-occur as Capricorn doesn't have many private investors following it.
Yet Goldman Sach's & Bank of America both know what's happening & have both been building up considerable voting rights in the company in the last 6 weeks. So there is a chance things will be different this time round.
If you look beyond the very short term, you'll see in the future an annual G&A saving of $50M per year, which is very significant indeed. It just goes to show how wasteful the previous group of directors were with shareholders money.
If your still here in a years time, we can look back & debate who turned out to be right regarding Capricorn's future.
LOTM
Lots of optimistic predictions going on here.
To see the future, view the past.
Consolidations have twice been followed by share price drops.
Repeating the same operations expecting different results is one form of madness.
I had high hopes for this company after the previous board was ousted. Sadly. I think its time to oust the board.
I've explained this before
Not all share-buybacks or share consolidations are good.
Shell & BP are prime examples of company's that have wasted 10's of billions of share holders money doing buy-backs at the wrong time of the oil price cycle. How they've got away with it is a mystery in itself.
Lloyd's I'd say are doing the right thing, as are the rest of the banks etc. They are buying in the shares at a price that is less than the value of the assets it owns. This slowly but surely increases the underlying value of the remaining shares. It doesn't dilute them.
As for Capricorn, the 2 consolidations & share buy-back are going to be transformational for the company & its shareholders going forward.
Remember the offer of £2.70 a share from 2 sources well that was worth £850M, since then the company will have paid out £452M after this special dividend & completed the share buy back.
Leaving £398M which if you then divide it by the number of shares in issue (95.2M less another approximately 4M for the buy-back) gives those previous offers a value of over £4.00 per share that is left.
If you look at the $50 M that there going to cut from our annual G&A spend, well that's a saving of over $0.54 per share going forward. In 4 years they'll have saved the current value of the company (post consolidation).
If there were still 315M shares in issue the saving is only $0.158 per share & it would take 13.6 years of savings to match that $2.16 per share of saving achieved in just 4 years now!
Earning per share are going to be over triple what they were before & most importantly for everyone any dividend per share is going to be over triple what it otherwise would have been.
So if they pay an annual dividend of $25M & why not since our G&A costs are going to fall by double that amount next year, then you'll get $0.27 per share in dividend instead of just $0.079
The benefit's are just around the corner, its just a case of holding on to receive them.
LOTM
Lloyds recently completed a £2B buyback, price still moved down
I guess if the shares are cancelled that £2B has gone to money heaven, what a waste,
Today received a corporate action regarding the share consolidation and share split:
there are fewer shares in circulation, so the price can increase significantly. You may therefore notice an increase in the share price when the Consolidation becomes effective.
***
I have been through this share consolidation twice with CNE.l, every time after the consolidation the share price always went south. Am I missing something here. In reality the
share stays the same for a short period of time, but in theory its suppose to increase the share price.?
Almost like the share buy back, in theory should increase the share price, but that has never happened, as they purchase and discard shares to reduce the total amount on the market.
A good read, thanks
I thought I'd write this for anyone new here or for anyone who wasn't paying attention back in May when the company distributed $450M via a £1.15 special dividend & 70 old shares for 33 new share consolidation.
When I first looked at it the share price was around £2.25 - £2.30 a share & the share buy-back was active, which I found really strange because they were in effect over paying for the shares they were buying back!
I think someone in the company eventually picked up on that & the buy-back stopped until the share consolidation was done.
In actual fact they should have stopped it until the share price was below £2.177 & then continued again, why ?
Well the inflection point with a dividend of £1.15 & consolidation ratio of 70 to 33 works out to be £2.177.
I think examples are the best way of demonstrating it to you.
So 70 shares priced at £2.177 give a total value of &152.40 You then receive a dividend of £80.50 (£1.15*70), the ex-d price of the shares should then be £1.027 (£2.177- £1.15) multiple it by 70 & you have an equity value of £71.89. You then divide that equity value (£71.89) by 33 (new shares) & you get a price of £2.178 per share.
The consolidation ratio (70/33) means there are now only 47.14% of the shares in issue compare to before. So you have a large multiplier effect if the closing share price isn't £2.177.
If it was £2.24 instead, then the dividend is the same but the closing equity value is not £71.89 its £76.30 & when you divide that by 33 it works out at £2.312 after the consolidation. In other words the original £0.063 difference turns into one of £0.134 Which means you really wanted to still own the shares at the ex-d date because you were better off.
Conversely if the share price was £2.12 at the ex-d date, the consolidated shares should only return to market at £2.058 which makes you worse off holding them at the ex-d date you'd be better off selling out before hand & then buying them back afterwards.
-------------------------------
This time round the dividend is £0.56 & the consolidation ratio is 3 old into 2 new ones. So the inflection point is £1.68
This time the compression ratio is 66.66% so there is a lot less gearing than the last time round. So the effect isn't as dramatic as before, but it will still make a difference to your bottom line.
At an ex-d close of £1.74 the shares should return to trading at £1.77 & if its £1.62 then they should return at £1.59
--------------------------------
In May I expected the share price to rise ahead of the ex-d date that didn't happen & the share price was very weak on its return to trading.
LOTM
Company website has just been updated with the largest 10 shareholders as at 8th Sept.
Plenty of movement during the 2 week period between the 25th of August & 8th Sept.
Goldman's & BofA's holding's both increased.
4 holdings didn't change at all.
Dimensional's holding decreased by a tiny 4,518 shares.
Vanguard had sold 84,058 shares 0.06%
Irenic Capital had sold 196,878 shares 0.14%
Blackrock had sold a whopping 3,317,175 shares or 2.32% taking there holding down to 3.13%
LOTM
Mr.Kioto
If I research another company & I find any of the old Capricorn directors on the board - I won't be touching it - that will be a complete RED FLAG to me.
LOTM
I have to admit. I am loving the new management, with their focus on returning profit to shareholders, cutting the fat, and updated Communicatons, keeping us informed and in the loop.
Sad to think that the old BOD and CEO could have kept their jobs, if they would have only listened to shareholders.
I should also add in case anyone thinks that I'm full of myself, I'm not.
Yes on paper I've made a profit of around £6,300 so far, but on trading performance I wouldn't give myself a C nevermind a B or an A. That number should really be over £12,500
There is a lot of room for improvement, I've made about 4 or 5 poor decisions in the last 2 weeks alone.
Need to be far more decisive in my actions going forward. Go with what you see/feel & take a loss if need be, if you think its headed lower.
All I've shown so far is that it is better to trade than to sit passively with your shareholding.
Good luck to all
LOTM
I had to go out mid-afternoon & wasn't sure what was going to happen during that time or when I'd get back.
I did have a sell order in place from earlier today at £1.72 but thankfully I removed it just in time when I saw what was happening trading wise.
So I ended-up selling 9,500 shares at just over £1.75, which banked another profit of just over £1,300 on those one thus taking my banked profit so far to £3,800.
I currently have 2 different bundles left 21,000 shares which are roughly £1,000 in profit on paper & 7,500 shares that are £1,500 in profit on paper.
So at the moment I should be starting out with at least 12,500 shares post consolidation, but I aim to improve upon this as soon as I can.
And yes I'm not happy about the consolidation only being 2 new for 3 old but there's nothing I can do about it. I would have much preferred even 19 for 30 as that would have meant 4M less shares in issue following the consolidation.
LOTM
LOT-M
Hi, and thanks, I hope all works out well.
Consolidation is 2 new shares for every 3 existing.
Hi Tren,
There will be a lot of old Cairn shareholders out there who are disappointed with the past performance of the company.
I think things will be difficult for Capricorn in the short term looking at the share register. They were a FTSE-250 company before & have a lot of institutional investors on the register & therefore not many PI's. With the further downsizing of the company more institutions will want to depart the scene as it will become to small for them.
It's also clear that there are very few PI's following the share currently & I don't think they will be attracted to it until they see the dividend stream start up next year.
So that open's up opportunities in the mean time for those that do know about it to make hay knowing what is going to happen further down the track.
$50M of G&A savings is a real game changer in itself.
LOTM
I didn't actual post this yesterday but I actually made 2 other purchases yesterday around the 155p mark in the morning one for 1,250 & the other 2,250
I am now multiple times where I want to be.
I could sell out right now & be in overall profit, but I'm not going to.
I will be reducing my holding, but this is going to be a core holding of mine going forward. I'm aiming to hold 10,000 shares after the consolidation & continue to trade it & try to build that number up slowly but surely with all the profits to 20,000 or more if I can. As I've already banked just over £2,500 of profits you could say I'll currently be starting out close to 12,000 post consolidation.
LOTM