Member Info for big-blue

https://www.theguardian.com/politics/2021/sep/15/patel-raab-and-williamson-tipped-to-be-moved-in-imminent-cabinet-reshuffle

PP looks set to be thrown out. If so, the lockdown lobby is out!

I posted earlier that this should have been done a while ago. This could have a very significant impact on the sp. The critical question is who form the lockdown lobby remains in the government able to shape policy. It looks like the open briefings against each other has finally forced Boris's hand. Has anyone walked yet?

Now for some fun!!!

Long over due!

Fugazi, hedge funds by their nature will have hedged against and will be changing positions rapidly to rehedge the hedge, so to speak. They shouldn't really give a damn whichever way it goes if they are doing their job correctly. However, the institutional investors like the pension funds will not be happy. In a year or two we will be seeing the consequences of the pandemic in falling private pension payments. New retirees are going to be hammered just like after the credit crunch. It is why I would put a 50/50 on IAG spinning off BA in a way that the iis will get a gain to offset the loss of divvies or allow BA to return rapidly to divvie paying profit. Those pensions have to be paid from something somewhere.

The war in Downing St, something many have whistled at me for citing on a frequent basis, is spilling out on the airwaves more and more with absolute statements on policy from one minister being reversed as policy the next day from another minister. Are there covid passports for nightclubs yes or no? Boris missed the opportunity to reshuffle the cabinet end of summer, he needs to clean out one side or the other as we are moving to a paralysed executive. It IS important for all of you to consider the politics and impact on the industry because they are the ones in part applying the rules crushing the industry. We do not want a compromise on testing, PCR removed to satisfy the free travell lobby, but a lateral flow required instead, to satisfy the lockdown lobby. We want the free travel lobby to have free reign in Downing St. When was the last time you wrote to your MP to urge them to support the opening up of travel? An email is free and takes just a few moments.
https://members.parliament.uk/FindYourMP
Remember to put your name and address on the email to demonstrate you are living in their constituency. Don't forget to lobby your MP to not only propose and support vocally the resumption of unfettered air travel immediately, but to remind them that face masks cause the spread of contagious diseases as described at the start of the pandemic and that climate change is a money making scam used and also used by ideologists that could never hope to force their ideology on people through democracy.

;) The revolution begineth.....

jed, I posted the LSE rules on when a company should be making statements. I did say it is a fine line because they have the option to say nothing to avoid market distortion, yet saying nothing can create market distortion. In such a case the silence is as good as a disclosure in the rules. The rules are designed to minimise share price distortions, obviously speculation can be difficult to acknowledge or deny. What makes this speculation important is where it came from. The rules define 'analysts' as having special access to information ahead of the market and are therefore under certain obligations about what and how they report. The source, Credit Suisse, is an analyst as referred to in the LSE rules.

"Concerns over economic growth in China has hit the travel industry."

This is given in the news piece as the reason why airline shares fell. Eh? How? What is the economic link? This is why you should do a 360 and DYOR - do your own research. What a bloody awful bit of journalism.

"You have two choices in an RI"
Wrong, there are 4 options
"Holders of Rights have the following options:
Option 1 - Take up their Rights.
Option 2 - Partial take up of their Rights.
Option 3 - Sell their Rights.
Option 4 - Cashless take up of their Rights.

"What you seem to be thinking though, and suggesting to others, is that the 170p or 270p is profit. It is not. It is something paid for by the reduction in value of the shares you already held. If the sp is trading at 638p then this is the point where the reduction in share value matches the value of the rights."
Wrong. I will have put new money in to buy the shares under option 1 and 2. Under 3 and 4 no new money required. You are employing a scenario where you are selling your existing share from a pre RI higher price to fund a new share purchase. I have never suggested or given even the slightest indication that THAT is an option.

"The one thing you should not do is nothing as then you risk losing your rights for no value."
Wrong. "Lapse - If you decide to take no action your Rights will expire or lapse after the Offer closes.
The Company will arrange for the shares that these Rights entitled you to buy to be offered for sale in the market. Any premium obtained above the Rights Issue price, less expenses, will then be paid to you. The total number of shares you will own will stay the same. However, the proportion of the company you own will reduce as more shares will be in issue."

However, boring or not, we can now all see the error in your assumption and how you ended up in such a pickle. You worked it as if the pre-existing shares bought at a higher price were being used to fund the RI. No. And there was never any intimation of anything remotely like that.

Now despite all the bile and nastiness you and your group want to throw at me regarding math skills, stupidity, trying to deliberately mislead people and ignorance of how markets work, to ask you to now man up and apologise would be too much. But we have slowly iterated to the source of your misappropriated assumption. Now if you had originally said, "Big Blue, interesting, but in the context of the original share price before dilution, how long do you think your holding will reach break even despite the 20% markup on the new shares?" That would have been the more intelligent and civilised way to go about it. Do you not agree?

Well, somebody is telling porkies here. The ig news story claims "Credit Suisse analysts believe IAG has about four more years of cash-burn coverage and thus should not need to raise equity this year."

Yet the latest Suisse statement I can find states, "Today, Credit Suisse (NYSE:CS.) cut its share price target on IAG to 195p from 256p, on “increasing rights issue risk”, following the heavily discounted cash call by budget airline easyJet this week.

“We think it is getting increasingly likely IAG looks to raise equity,” the analysts said and, though they have not yet changed their financial forecasts, the price target was lopped to “reflect the risk of shareholder dilution”.
https://www.proactiveinvestors.co.uk/companies/news/960013/ba-owner-iag-s-share-target-cut-by-credit-suisse-on--increasing-rights-issue-risk--960013.html

So, which one is it? I suspect IG will be making a retraction very soon. They have grossly misrepresented the C Suisse statement.

Couchman, I think due to post market trading, if there is to be an evening RNS then it would have to be after 6pm. I might be wrong on that time, apparently I am wrong on everything else and that all the profits and paid for refurbishments and white goods bought this year was out of pure luck, month in, minth out. However, for a Friday RNS I will guess 7.00pm.

Hexam, YOU have decide to suddenly include market prices outside the RI. I did not and I never at any point ever referenced the profit potential with the RI within the Ex period. You are aware of that but you will not admit that.

If you want to extend the debate to now examine the drop from pre announcement to ex rights, what potential profit is there from exercising the right, how much that off-setts the rights dilution, and whether the remaining margin could be restored due to trading conditions improving [the wider argument], then do so. I specifically, exclusively and very clearly looked at the consequences of the full participation buy based on the price on the day and the share offer price. That is to be compared with selling the rights or not doing anything. You detractors weren't evan able to work out a simple percentage gain.

So get your terms of reference right Hexam. Otherwise, you show me which part I attempted to state that taking up the rights would end up with a profit compared to before the Easy J RI. Post it. It doesn't exist!

Meanwhile the sp drops further and the return diminishes which affects the dilution deviation which changes the assessment, one that can only be made if you calculate what the RI is going to return based on the prevailing ex share price. This one looks like it will be a late decision on the 22nd.

As IAG dips sub 140, the RI speculation is having a material effect on the sp. But IAG does not make a statement about the speculation. It can only mean they cannot deny a RI is on the cards, that can be done very quickly. When will it happen? How long can IAG allow the sp to be affected by speculation before having to step in? How long before the LSE demands a statement?

Nick Robinson pressing mask wearing hard this morning, telling the tories to be an example in the house irrespective of whether they have any use. Classic example of the mask lobby pushing people to wear these masks whatever the consequences. Javid did not take the opportunity to make the statement, ummmed and rrrred and I thought he was about to do it, the masks spread the virus. Opportunity missed. The pandemic and all the consequences for travel will continue as long as the mask wearing is imposed either through legal requirements or mask lobby coercion.

"with the right starting point of 789p as the pre-rights issue price"

Ha, quick shuffle of the goal posts there. I never once in any place in any calculation involved any price pre announcement. I have pointed out that the issue itself based on the price the market fell to on the news of the rights has not crashed below a threshold which would make taking up the rights being a loss, based on the 580p price. Why you are back peddling and moving the goal posts to earlier periods with higher sp I think is to dig yourself out of a little hole. I have proven that the buying the right generates x amount of profit when sold at the same level of buying. That is a major consideration when deciding whether to take the offer, sell the rights or sell part to fund the purchase. It was and always has been presented in that bubble.
As for the wider prospect of restoring the sp, where is the top in the future to compare to you figure as a per cent gain in order to say the dilution drop is cancelled out? That is the normal stuff of speculation. I laid out the specific calculations about the profitability of the issue based on the sp at the time given the 410p issue share price. You decided to then extrapolate into other areas, your choice but you cannot then back peddle that into my subject matter and magically declare my calculations are suddenly wrong. Tap it out on a calculator as I show inthe context I put them and you will see they are correct.

1% gain??????
(580000+112030)/580000=1.193155172
which is almost a 20% gain.

I'm making the point that the travel sector may have bottomed out and that that is priced in and when things shake out, it is a positive gain. Restoring to pre announcement is the same for all the shares in the sector.

Oh dear oh dear oh dear.

Let's say I have 1000 Easy J shares now. Let us work with an ex rights price trading on the exchange as today at 580p per share.
My holding is therefore 1000 x 580p = 580000p
The offer is 31 new shares for every 47 I hold. 1000/47x31 = 659 new shares.
I pay the asking price of 410 per share means a purchase price of, 410px659=270190p
I sell new shares on the 24th, for the sake of argument let us hold the sp at the diluted price of 580p
659x580p=382220p
I pay back the purchase price for the new shares and the profit for the new shares is
382220-270190=112030p
I still have my original 1000 shares, they still have a market value of 580000p
But now I have an additional 112030p in cash.
For the effective gain per original share, 112030p/1000=112.03p per share added to the original share price of 580p and I have the effective equivalent of 692.03p per share. If the pre rights share price is 680p, I have an effective gain of
692.03p-680p = 12.03p per share. For 1000 shares that is 12.03px1000=12030p overall gain.

Not talking about selling the rights Hexaam..... talking about selling the shares themselves. Pay 410 for something that sells at 580, that is 170 profit. Add that profit to the value of shares held, 580 +170 gives 750. If they were trading 700 before the rights, I have 50 per share up overall [in cash] after selling allocation.

whoops, no skin full of new shares, just 40p up if I sell rights at 580. But I wouldn't.

nothingforever, issue price is 410 for the easy J rights. If I buy my allocation at 410 each and sell them at 580 each, each one has made a profit of 170. The point I am making is that the ex rights price has put Easy J down to 580ish and it looks like there is no further fall due to the rights, it is already priced in now. As for the dilution of the original holding, 580 +170 = 740, the sp just before rights was just below 700, so I am 40 up on that, plus a skin load more shares. And this is BEFORE any significant improvement in travel restriction rules, so the sp should lead.

With luck, any RI in IAG will be as profitable. However, my plan is to buy in post RI and just cream any profit when the US opens up. All assumes timing works out, but on the present expected timetable that may just happen. COP26 might scuppa all my IAG plans though.