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Im new to all this rights issues, Would you sell shares tonight and then buy again tomorrow on the open ?
Examples
CLOSE TODAY Theoretical ex rights TOMORROW
400p 330p
390p 323.2p
380p 316.4p
I expect buying on the open. I certainly will be.
I despair/ Read my post below.
at 8am opening.on 7th April.
Now the rights issue entitlement date has passed isn't the Sp supposed to be falling?
Here goes...
Let A = price on close day before ex rights
Theoretical ex rights price is worked out by this formula (A x 25 + 1.84 x 12) ÷ 37
Eg A = 382, then one would expect the ex rights price to trade around 317 /318 p at 8am opening.on 7th April.
( NB the price on Thurs could have been boosted by those trying to secure rights and Tues the price may drift.)
On 7th, the market will decide whether the price should move up or down as normal.
Shareholders with rights can decide for themselves whether to pay for the rights by 21 Apr or sell the rights in the market at whatever premium there is. On the 22nd Apr the dealing in new shares commences.
GLA
I am not an expert but I'm thinking that the shares will trade at about £3.15 once they go "fully paid" on the 22nd April assuming they maintain current price to 7th April AND the Rights Issue is successful. Although you don't have to be a rocket scientist to work the anticipated price!
Here is a suggestion but not advice.
An option to secure the rights (by clos doday if that is correct - recheck it) , subject to funds, would be to open a broker account elsewhere, as in immediately and sell the remainng shares with freetrade and have 2 windows open to buy at the same time so you are only out by the spread and stamp.
The freetrade proceeds would be cleared to fund the rights and if you can do this in an ISA then even better.
HL is done in 5 minutes if you havre cleared funds.
I find it hard to accept that Freetrade will not honour the rights. Are they pocketing them as as someone will get the entitlement.
If you lose the rights then, not advice, it seems you will be caught if you do not sell the shares pre ex-rights date.
DYOR & GL
Dumbwick , change your broker .
Is roaring Kitty on board?
@Dumbwick, I don't know what you bought at but at least they rose a bit prior to your sale. You could always buy back or might find something better. Good luck.
Sold half my holding today @3.74.
Depending what happens tomorrow I may be out all together. Shame.
Dumbwick, I think you are right with 16:30 Thursday.
Good Luck
I don't understand if SSPG decides to give this share for shareholder how could a broker or platform can stop?
(...not asking for advice, just checking my understanding!)
@Brocksford
If I read correctly the entitlement date is Close of play 01 Apr. Therefore I should sell at some point between now and 16:30 on Thursday? (I'm assuming once entitlements are achieved then the sales will start and the price will drop)
Basically Freetrade do not/will not/can not allow me to take up my rights issue.
My experience is that on RI the price drops (which is fine if you took up RI as you had a tranche of share at a reduced cost) As I can't take up my rights I will be, relatively, at a loss.
Therefore it is my thinking that I ought to sell before said drop. My question is when! ( I know that is the big question with all shares but wondered if there is a historical correlation as to when the drop occurs - e.g. ex date or issue date)
@Dumbwick
If you are saying your broker will not allow you to take up the rights issue then your decision point would seem to be tomorrow.
DYOR
@Dumbwick
Could you explain that a little more?
Thank You
So I assume it is best for me to sell before the inevitable drop in price.. my question is when will this happen? 1st, 7th or 22nd?
...really unhappy with Freetrade
Elective Corporate Action Events
Rob Jackson avatar
Written by Rob Jackson
Updated over a week ago
As of 9th March 2021, Freetrade cannot support elective Corporate Action events, including Rights Issues, at this time.
Oh ok thanks for your time. If I may ask, my understanding is Shareholder will hold all their shares as to get a 350 share at 1.84 , which create demand so it will stay atleast around 3 during 1.84 sell off. So a shareholder will get 1.16 profit immediately. Is that correct? I assume 1.84 a share will not be available to public then there is a possibility of sell off immediately after the purchase? I am confused whether to buy or not.
Some clever sausage like yourself could provide any details , if available.
no, basically you can buy 12 more shares at 1.84 for every 25 you own is how i read it.
they will list at the Current SP but likely price will drop on admission read the prospectus.
in short its a good deal if you think the share is a positive and will grow as these Rights issues are discounted.
DYOR.
I am new to sharemarket. This rights issue I don't understand. Please clarify the below. For example If you have 25 shares @340 or anything , SSPG will give 12 shares @184. Will this reduce the current price from 340 to 184 and recover to 340 in 2024? Is this correct?
This is going much higher (towards £4) for those trying to get in for the rights.
GLA
Cannot see how freetrade wiggle out of this. Perhaps call again to confirm with another operator if there is a telephone number.
or check out with FCA direct and they should advise.
https://help.************/en/articles/2282151-how-can-i-complain
Good luck.