RE: RI / SP3 Aug 2020 14:08
DaggerMal,
It’s really your call on this one. Obviously depending on your average you want to be as low as possible, even more so the SP being as low as it is if you expect the market to pick up again.
You have two scenarios, you either average down now at the current low or wait until the RI price is announced (IF).
If the SP continues to drop then the RI would turn ugly and would put a lot of people off. Which would most likely see the RI cancelled. Reason being, you can’t keep taking negativity in to a stock and expecting it to be purchased through a dilution to its current share holders. This would be suicide.
On the other hand, you buy back now to lower the average in the hope the SP rises within the next month which means you’ve got a good deal, then if the RI happens in September, you’ll get an even better discount bringing your average down to an even better position.
I can’t tell you what to do as I don’t know exactly the movement of the SP/sentiment of the market at present.
Q2 reports are being released all over the market, one being banks which is driving the SP down along with Covid cases.
Personal opinion is aviation is taking a overhyped battering each day even though we know all bad news as it’s already been announced. This is because or earnings being reported around all industries, covid still lingering about with cases and shorters/traders making some money and pouncing on the blooded markets.
Covid is going on longer than everyone anticipated but will turn eventually. Let people get burned in the process. if you looked to invest in the company for a longer duration then ride it out as you haven’t lost your money until the company goes burst.
Negative derampers/shorters might say a paper loss is a sign of defeat, however, my intention during a pandemic was to buy in at a value during that time I felt was beneficial to my strategy of a long hold. Yes, in hindsight, we could have got in at a lower price, but hindsight is a great thing and no one can anticipate a market.
If you look at the lows upon the collapse of £1.60 on the 18th March, look how quickly it picked back up hitting £3.50, so anyone getting in around a £2.50 average was a great price considering the average SP of £5.30 pre covid and the highs of £7. Obviously not expecting those prices this year, I have my target price set that isn’t asking too much considering the pandemic. If I hit that, I walk away with a large sum that in my eyes has been worth the wait.
Markets can change so quickly and with vaccines on the horizon, airport testing and localised quarantines, it’s only a matter of time before the SP begins to rise.
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