The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Castle - I’m not disagreeing with you but I’m suggesting it might be a bumpy decline with investors reacting to any sort of news having an influence on the share price which will afford the opportunity to trade the highs and lows.
I’m more than happy to trade on a 5p movement.
I do not think there is too much doubt that this share is trending down - considering all the negative external influences it would be very strange for it to trend up in the short term.
I bought in towards the bottom yesterday as I’m gambling on a camel train decline rather than a swift linear one. I’ve done well swing trading this share over the last 6 weeks so am using house money at present.
If I had an underwater position and there was a small bounce I would seriously consider selling ( I know it hurts) but if you genuinely fell this share will make it long term then I think there will be an opportunity to get back in at a more favourable price. IMO
I still think there is money to be made in this share both long term and day trading.
I’ve bought and sold 12 times in the last 6 weeks initially buying in at 165.
I sold out before the rights issue but got back in after the drop on the first day then sold shortly after.
I’ve bought back today at 112 albeit on a limited bases because I think they have been oversold In the very short term and hope for a little 5% bounce next week.
But the trend is definitely down but hopefully not in a linear fashion.
IMO.
I think there is a little sunk cost fallacy influencing this share. All because the share looks cheap it does not mean it’s good value.
There are too many external influences out of IAG’s hands to make this share more like a bet than an investment decision. IMO
Sentiment is key - until people are willing to sit on a plane or more so with BA start spending on business travel it’s difficult to see how the SP will hold in the short term.
With winter looming I can see problems ahead.
I do not hold IAG at present but if conditions start to improve I would definitely add them to my long term portfolio but at present I think the downside is too risky.
Possibly because IAG model is geared towards expensive high margin trans Atlantic business travel. This makes up a much bigger percentage of their profits.
This has been very badly effected and what’s more many companies that use this type of travel have stated that due to better technology they will not be returning to pre Covid business travel levels some cutting back 50%
Is it possible the sub-set of creditors are being obstructive as a lower share price will mean more equity
The heads of terms are generally non-binding and with the deterioration of the oil outlook they could have run into trouble there.
The massive dilution is also a big worry.
I’m sure if they could they would have got this done as quickly as possible as it’s killing the company.
Because there are now many more shares in existence the original share price has to be diluted to account for this .
A share valued at 200 is now worth 131.14
200 x 0.6557
Hopefully I’ll wrong but I’ve seen it before - PI’s who initially will not get a look in at the opening bell while institutions take their positions. PI’s will pump the price by trying to average down their old prices and others taking theIr rights issues then the institutions/ shorters will cut the legs from under.
If you round up and plumb all the figures into an online Terp calculator the price will open at the Terp rate. Anything after that is market sentiment
The rate is 129.75 approx
I’m not sure 130 is that cheap considering there is now nearly 5 billion shares in circulation . 5 weeks ago it was trading sub 160 old money
The only way the share could recover to this extent is if the company embarked on a massive buy back and cancel scheme but this is usually at the expense of dividends - swings and roundabouts.
It depends if you think BA are a good investment.
Remember the 5000 shares you own plus the new ones will trade on opening at the Terp roughly 129p so overall you will not be any better off just own more shares in the company.
Be mindful that the RI is going to pay down debt and be used to help the company through a challenging time so will not be used to add real shareholder value.
No 3 for 2
Divide 5000 by 2 then multiply by 3
That means you can buy an additional 7500 shares
I do not get this discounted benefit? It’s more of a compensation to equal the loss in value of your existing holdings. If the share price drops to around 135 you will have maintained the status quo. Lower then you would have been better selling and buying back - higher then you will benefit from the rights issue.
It depends on how you view the short term prospects of the company.
Yes - they will be shown ex rights and will be trading without them at around the Terp.
I sold out Friday.
It’s a big discount which can be looked at as a bargain or they are desperate to get it away.
With nearly 5 billion shares around after issue I can’t help thinking they will be trading at sub 130.
I will be tempted if they touch 180 tomorrow if not I’ll wait for the dust to settle.
There just seems to be too much bad news around at the moment to take a punt on a company whose profits have fallen of a cliff. Long term I think they are a great buy but 20 to 30p at the bottom end will not make much difference in 5 years time - unless you are swing trading of course.
Not very scientific but live in London favourite beers always popular thought oversold so got in at 490 the group holds lots of free holds so thinking long term.
Bought 8 other stocks for long term.
Although being having fun day trading IAG
MacRs.
Thanks - I see your explanation makes more sense
If you look at RNS Number : 5951Y they have designated close of business on the 9th Sept as the price for the Terp
Unless I’m reading it wrong . I know this is unusual and will lead to a volatile day tomorrow