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You have two of biggest players in this world
Dark rock and Giant squid haha
And they are doing a perfect job taking it down
i'll eat my cat if this doesn't bounce to 18.5p minimum.
Won't anyone short the HMON who is 'taken up against' receive the 15p per HMON? In which case, they're only embrassed to the extent of HMSO - 15p? Basically similar to the lapsed rights proceeds, which I can't imagine will be phenomenal!
Yep, agree with Thunder2040, you'd normally have to return to lender shares lent to you with all the associated perks accrued during your holding (incl. dividends, splits, etc.), these are standard terms unless you have something different agreed separately - otherwise lending shares would be too risky and subject to significant manipulations...
Yeah exactly, so the majority of the short position declared was open pre rights, hence more than the 0.8% of rights is needed to close it out, a lot more. Watch and learn
You don't have to return 24x times more shares to the holder if you are simply short HMSO. e.g. you shorted HMSO as an arbitrage after they went ex-rights.
If you were short HMSO at close on 8th Sept (day before ex) then you will also be short 24xHMON.
But to net off the short in HMSO you only need to take up the same number of HMON rights.
Thunder,
Borrower returns the shares through the rights issue
No problem here
Lender gets his shares back plus all rights conv into ords
Alexios, you've also got a strange idea. Where does "1HMSO = 24HMON" come from?
One HMON grants you the right to pay 15p to have it converted to HMSO. In other words:-
HMSO = HMON + 15p
That's not the same as 1HMSO = 24HMON by any means!
You missed the point that you have to return 24x more shares to the holder.
Alexios, I'm not mixing it up at all
There are currently 153,258,722 HMSO shares in issue
There are 3,678,209,328 HMON shares in issue (24x the number of HMSO)
Even if 100% of the HMSO shares in issue were shorted you'd only need to take up 1/24th the number of HMON rights shares in issue to close.
It will not go into admin IMO, as they can cover cashflow with this liquidity with fair easy. Moody's have this still as investment grade - and we have had the worst shock already.
50% asset write down still yields value...its a risk play - I don't expect all to agree
Thunder2040 - IMO it is a big mistake to naively picking gross equity off the balance sheet, net equity would be much more suitable for this purpose (a.g. accounting for market situation for salvageable asset valuation purposes, waiving most of questionable goodwill, etc.), then discount for safety margin, if it goes into admin - assets will go at even higher discount because market is extremely saturated on supply side and there's demand shock on another side of it, crazy risk premiums on financial markets.. generally taking raw NAV as basis for valuation might be a very bad move..
Poleaxe,
Why are you mixing it up
1HMSO = 24HMON
So 1% HMSO = 1% HMON
Surely if there was a share consolidation they need more of the rights than that. I will say it again, the discount to NAV here is too high, it will correct. That is my opinion and I have backed it up with £. Hope I am right.
Even if 20% of the HMSO were shorted to would only need the about 0.8% of the rights to be taken up to close.
Besides, many traders will have closed a few days ago, when the HMSO/HMON difference dipped below 15p, making it cheaper to trade out that take up the rights.
Plus the HMSO became unborrowable for many in recent days and even existing short positions were being called in yesterday.
The rights will have been heavily taken up by the shorts - its that simple.
The Intu BOD believed they were too big to go down until the night before. I reckon a lot wont take up the rights here so they will get nothing back if this goes below 15p....which will suit some in the City
Potentially yes, but Risk/Reward balance is sort of very disadvantageous, I won't take it until there are reliable good turnaround news on horizon, but worth keeping eye on it.
even at 1.3bn NAV there is value here??
..and even these raised money can be drained in just one year via opex, I suspect we will see it in report next year..
downbutnotout - classic value trap and judgement based on historically outdated/irrelevant information, NAV cleaned of junk (net equity after expected asset write-offs due to new valuations on property under these covid-hit realities) is around 1.3B, although you can add this new equity raised via RI (+ 400m/500m).
Blackrock buying. Directors buying. Cornerstone investors buying. The only reason this is dropping is because the hedge funds can short it down to 15p and exit with the rights issue. It will come back up to about 30p near term.
Previous all time low Mcap at 40p with 766m shares in issue £306m
£306/3831= 7.99p
This is single figure
Punchy maybe I dunno
You asked I answered
Single figures feels a touch low. Well, a lot low really. But thanks for your input :)
NAV £4bn don't forget.