The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
I think quite a few underestimate the costs of doing this kind of rubbish. Everything around listing, placings and corporate stuff costs loads. Which is particularly bad for smaller companies. Doesn't surprise me at all the the cash is at that level. The time to pull the plug was months ago, not now they've spent all the cash on getting this deal done. It doesn't make sense.
I think it's important to look in what happens to your shares if they are delisted in your trading account. It's probably old hat for people who have traded aim a lot this year, but many people won't know what happens. I only have a vague idea and I don't really want to transfer out of my ISA. Does anyone know for sure what happens with delisted shares in their nominee accounts?
The fact they never reply to emails just underlines the risks with trusting them with returning cash. They'll do it in their own time. Also the costs of returning cash are very much unknown. How much is this abort cost thing they've agreed to? £50? £500k? I don't know. Probably a stupid amount knowing them!
The only reason I prefer that option is that I don't trust the management, particularly when it comes to returning cash. I'm surprised many still do have enough faith to go for that option, after the year we've had.
A lot does really depend on how this new company will trade initially. If it hold around the 20p mark, then that's decent enough. Given that only the old amc shares will be tradable and there's no placing overhang, it is possible. There might limited stock available for a while.
They certainly make it sound like the cash position won't be as great as everyone thinks. You have to take in account the very high admin costs and rto costs since that final results figure. It'll be a lot lower now. Good question for the Q and A, how much cash do you have now?
Do you really trust the board to wind this up in a timely manner, though? I bet they would drag it out as long as they could and you'll end up with less and just have to wait longer for it.
23p would be good, but you're right, it'll be lower than that.