Member Info for Hexam

@northeo - I think this is normal, assuming that is the usual fee you pay, as selling the rights is like any other sale transaction (whereas taking up the rights isn't). My broker also charges for selling the rights, would be interesting to find out if any don't.

er...that's right. If it was the sp would be higher than 117p. It's supply and demand that drives sp.

Fair enough HC, we have different views and that's fine - and I hope you're the one that's right!

I suppose the difference is that I don't believe this was always going to be walked down to close to the IPO price as if someone was doing that on purpose (IPO churn would be expected to move it down a bit) - just as I don't believe MMs are holding the price back as this seems to have been the mantra on this stock (and many others if you look at other boards) for much of the past 6 months. It's simply that demand has not been there.

As I said I do believe it is worth more than the current price (that's why I'm holding after all) and I do believe if BTC keeps rising that the sp will break free at some point but there is no guarantee it will.

Longinvestor - that was from the Sep 17 prospectus. The final prospectus filed on Sep 23 ran:

"of which approximately 10,649,983 will be subject to 90 day lock-up agreements"

"there really are rare opportunities where everything aligns and the chance of a share price surging is very high - this is one of those instances"

Really? I believe the share price should currently be higher and there are plenty of reasons why it may go much higher still - but also plenty of reasons to think that it might not. Surely if it was as clear cut as you say then the price would already be much higher?

Yes, agreed, but the lock in may apply to all shares they own, not just any purchased in the IPO.

So basically we don't know but like you say we should be able to find out soon.

@Lolades78 - Doing a bit more digging I see the amount of shares subject to a 90-day lock in was 5.6m on the prospectus published on Sep 17. Is this coincidence or is this where you are getting your figure from? If the latter then this number changed to 10.6m on the final prospectus but in any event I don't think you can infer that it all relates to director buys in the IPO.

"The directors bought 5.6 million at the IPO."

Did they? I couldn't find this anywhere. I know the total amount locked in (10.65m) but can't see anything that breaks this down. If you have, could you please point me in the right direction? Thx.

Yes Defroster I believe that is the case - I think you may have to include the booking reference/flights details or whatever in the same photo to show the test relates to the trip (though hardly seems foolproof!?) but sounds a lot less hassle and on average around half the cost compared to PCR (though obviously costs vary a lot by provider).

The ex-rights price was actually around 280p as the price when the RI was announced was 326.8p but then spiked on this news before it actually went ex-rights a couple of days later.

More importantly though we have another step confirmed on the opening up of the skies with US confirmed for 8th November.

https://www.bloomberg.com/news/articles/2021-10-15/u-s-to-allow-vaccinated-foreigners-to-enter-from-nov-8

Yes, US reopening 8th Nov - reported (though not confirmed) in the Telegraph. That's behind a paywall so here's a link that refers to it second hand.

https://www.ttgmedia.com/news/us-set-to-reopen-border-to-uk-travellers-on-8-november---report-30958

If Gunning told the board a while ago then it is odd there is no mention of what he is going to do next other than "it is now the right time for me to seek a new challenge". Could be very good reasons for this (just wants to take a break, new company not in a position to announce etc.) but everything, including the language used, suggests that IAG perhaps are the drivers in this - for whatever reasons.

RNS's like this can easily spun many ways and all sorts of conjectures can be made out of it - positive and negative.

One thing that is clear is that IAG are on the front foot on this and Whitbread are on the backfoot as for them a "process to determine a successor is now underway". So with the new appointment already lined up it suggests IAG knew it was coming but Whitbread, and maybe Mr Gunning, didn't.

Yes in a rights issue "there are various options to buys and average down, sell the rights, part sell and buy" etc but you do not profit from any of these. They are all financially neutral and the only difference between them is how much you keep in your pocket and the value of the diluted stock you have at the end of it (the sum of the two is always the same). These are effectively the same options you have with any other kind of dilution where you still have the choice to sell, hold or buy but just in the more usual way.

A dilution is a dilution whether it is a rights issue, placing, debt-equity swap or whatever - there is no way to 'cover it'.

If the number of shares increase by 20% then the earnings per share is diluted by (nearly) 20%.

If you partake in a rights issue you are just buying another glass of the same diluted stock - you are not increasing the concentration of the glass you already have.

So the more important thing is not what form any dilution takes but what the company can achieve with it in terms of growing back EPS and whether this offsets the impact of the dilution. With the skies opening up I think that would be a close call so personally whilst I don't expect a dilution I'm not too concerned about one.

@Imarcham - "Not sure why you two are pushing the same RI message so heavily"

Simply part of their repetitive and relentless scare tactics as most investors don't like them even though as you say they are usually not as scary as they seem - and indeed if the funds are used well they can end up being a good thing.

One point though is that regardless of whether you partake in the rights or sell them your shares are diluted - at least initially - as dilution just means the earnings are spread over more shares in total. By partaking in the rights you maintain the % you own of the company but you've had to pay more in order to do that.

I think an RI is unlikely though possible, but personally I'm ambivalent about it as, like you, I think a stronger balance sheet should put them in a better position to take advantage of the recovery so that ultimately the Earnings Per Share may end up being higher. But who knows.

It's not so much because of the impact on HODL that a rising BTC price should impact sp it's because of the impact BTC price has on future mining revenues. In fact it should be geared as whilst the mining revenues rise as BTC increases the costs don't so profits should rise faster.

Of course it's not that simple as mining difficulty also tends to rise as BTC rises and the sp is affected by a lot of other things than just BTC. As we've seen.

Isn't another reason simply that they are running just 56% of services. Obviously the services they aren't running are not deemed economic as passenger demand isn't there yet to justify them. Equally though it won't be the case that all the people that want or need to travel are just spread over fewer services as some will not have a service at all that meets their need in terms of either route or time.

By contrast trains I think are running much closer to normal - indeed the routes I use appear to be back to a full timetable.

"The fund raises have tended to result in a market cap drop."

Maybe for ARB but that's certainly not the norm. Assuming no change in sentiment the mcap will rise by the amount of money raised, initially. Sentiment is often negative but normally nowhere near enough to offset the amount raised unless that amount is very small as a percentage of mcap.

"Chuz if the market cap goes up it means the share price has gone up."

Not if it's via a fund raise which I think was the point.