Member Info for Henrythecat

I’ve done really well trading in and out over the last 6 week selling before the rights issue. Unfortunately I got suckered back in 112 but luckily I managed to dump them at 109 before they hit their lows
I will not touch them again until the new shares start trading and can gauge institutional sentiment

Very short post I was being glib. There is always a data point that makes your averaging work. But with IAG with such downward pressure this is not the case.
Also you are losing the opportunity to off set some capital gains tax against more profitable shares held outside of an ISA.

If you dump at £2 your maths do not work out

MacRs
I understand- the world would be terrible if we all agreed with each other - l appreciate other points of view.

MacRs
I understand the principle of averaging down but on a falling stock that you believe will eventually make a come back - mathematically you will maximise your profits in the long term by complete sell outs and re-buys. I understand why investors do not as there are human factors involved but purely from a dispassionate point of view it does not make mathematical sense. IMO.

George - by selling out completely and buying back cheaper offers much better returns in the long run then simply averaging down. If you sold out 5000 iag at £2 today you could get back in with 10500 shares.
Minimising losses is just as important as maximising gains IMO.

I never understand averaging down. If you truly believe a stock is going to fall why not sell out completely and buy back at cheaper price . This disposal can also off set tax and capital gains etc.

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.