Member Info for JoeNinety

Interactive investor.

From the Chairmans's letter:

General Meeting: 10:00 a.m. on 5 January 2022
Announcement of the results of the General Meeting and Open Offer: 5 January 2022
Admission and commencement of dealings in the Tranche 2 Placing Shares and the Open Offer Shares on AIM: 8:00 a.m. on 6 January 2022
CREST accounts credited in respect of Tranche 2 Placing Shares and Open Offer Shares in uncertificated form: On or soon after 8 a.m. on 6 January 2022

Certificated shares are distributed on 18 January.

So have mine. It has to be said that they are hardly worth the bother, though at least they are one of the green ones (having cost nothing).

@Fozdog. I'm inclined to agree with you.
Apologies for posting twice. Finger trouble.

If I've understood this, the 26p represents a distribution of book cash over all the shareholders. If 75% accept the offer now but 25% don't, could this eventually mean 3 x 26p = 78p for the non-acceptors only as the cost of buying them out?

If I've understood this, the 26p represents a distribution of book cash over all the shareholders. If 75% accept the offer now but 25% don't, could this eventually mean 3 x 26p = 78p for the non-acceptors only as the cost of buying them out?

No offence taken thomson.
In answer to your questions:
No I am not a 'little board'? Did you mean 'bored'? I'm not that either. Do you proof read your postings?
Yes.
Yes. If I thought there might be a rights issue to tread water I might have sold by now. Maybe you could explain why it is nonsense. I am happy to be educated.
I accept your best wishes with good grace.

For some reason I find this difficult to follow. Does it mean:

WHERE an offer is declared unconditional in all respects (and so the bidder, together with any concert parties, holds more than 50% of the target company's voting shares) but the bidder fails to acquire all of the outstanding shares,
THEN for a period of six months from closing the original offer a bidder, and its concert parties, cannot acquire further shares on terms that are more favourable than those that were available under the bidder's original offer or make any special deal with favourable conditions with any of the minority shareholders (Rule 35.3, Code)
UNLESS such special deal is given the consent of the Takeover Panel.

@fcdbpoly. Most of the time, yes, but not necessarily.

In a rights issue you give the company some money, so in theory it should now be worth more. A buyer would have to pay more for it because of all the new cash that it has.
You get some shares in return. This would amount to dilution if the value of the company stayed the same. But it should be worth more now because of all its new cash, so the two should balance out. You should be no worse off.

This can be illustrated with an (odd) example. The company could pay all of its new money immediately back to the shareholders as a special dividend or a share buy back. Everyone (the company and the shareholders) would then be back to pretty well where they started in wealth terms. There should be no 'dilution' of your wealth.
The mere fact of a rights issue, then, should not make any difference to shareholders. The shares might suffer a bit in this example but only because the market would probably decide that the company management were slightly bonkers.

So what matters in a rights issue is what the company is going to do with the money or, in the short term, what the markets think that the company is going to do with the money.

For a mining exploration company it is usually bad because the company often wants to sink it into a bigger hole in the ground. A hole in the ground is a hole in the ground, and if the existing one has produced nothing the bigger one probably wont. The company will be worth no more in the long run but has issued loads more shares. This is dilution.

On the other hand suppose a miner is already producing gold but decides it can triple production by investing a tidy sum in plant and machinery. It could get the cash for the purchase from the bank but it could also issue new rights shares. More shares would not mean dilution (of value) if the value of the company rockets as a result of its increased production.

The reason that I am not expecting a rights issue for this stock is that I don't believe that it falls into either the 'desperate' or 'has a golden opportunity' scenarios.

... I should add that this is a personal approach to rights issues, having gone through a few of them, not a professional one.

@808state.

A rights issue is a sort of 'loan' from the shareholders. The company is saying "any of you who are wise (or daft, see later) enough to be holding our shares on a certain date can ‘lend’ us some money. Don’t worry, you can get your money back at any time – but not from us. We’ll give you a receipt, in the form of extra shares, which you can trade on the open market on the same terms as your existing shares." You don't have to give the company your money in return for these shares, and the effect on your wealth depends on a number of factors.

• If the company use the borrowing in a neutral way, or if the market expects them to, then the real value of your holding should not change. i.e. if the whole company was worth £x beforehand and it extracts £y from the shareholders then its market capitalisation value becomes £(x+y). The shareholders have put more money in but own a proportionally bigger company.

• If the company invests the cash wisely, for example producing a world-beating product, it may grow beyond £(x+y) and the enhanced growth means that the shareholders will be quids in. They’ll own a much bigger company and the value owned by each of them will increase beyond their extra investment. This will happen very soon if the market just thinks that the company will grow – the shares will go up in anticipation. You actually still win (a bit) even if you don't take the offer.

• If the company squanders the money, on pension payments for example, then the shareholders will own a company that is still only worth £x, so they will have lost what they ‘lent’. They can lose this well before the company has actually squandered the money if the market just believes that it will be squandered, because no-one will buy the shares at a good enough price, which is the only way the individual shareholder can get the money back. As a result, you lose whether you take the offer or not.

So a rights issue doesn't have to be bad. It is bad if the market thinks that the company is desperate. It is good if the market thinks that the company is raising money to make a brilliant (shortish-term) investment. And it can be somewhere in between. It depends on what the company wants the money for, on the size of the issue and on the offer price. That being said, most do seem to result in a fall in the share price, to a degree which depends on the offer size and price.

Hopefully that wasn't too confusing.

I have no great concerns about a rights issue for this stock.

It will very probably be somewhere between 25p and 40p. Does that help?

... or it is a large number of small traders who go under the reporting radar.

@FunInvestor. You seem to have a good point. Presumably the ones below 0.5% are often individuals that haunt these boards sowing mischief. Is there any way of finding this sub 0.5% total and how it has changed?

Interesting. Why doesn't it exactly agree with the shorts chart under the 'CINE Shorts Positions' icon at the top of this LSE page? A manifestation of the several different ways of expressing short positions, perhaps.

Hi Yey. I'm new this year too, and like you have made a few mistakes. I'm up on half and down on half, some of the latter at your 60% level in CINE. The downs arise from a variety of reasons. Your good advice about not acting on impulse would have stopped one loss (in that case from trying to catch a rising rocket rather than a falling knife), and others could have been prevented by paying less attention to the optimists on message boards like this one.
So I sympathise with your views on rampers and derampers. I'm not sure about your place in hell for shorters though. Shorted stock can be a helpful warning flag. It is a very risky play for the shorter, so they have to believe in themselves to take this risk. It is only underhand if they also go in for manipulating investors by spreading misinformation and deramping to facilitate their ends.
Hopefully the remaining (what you might call genuine) shorts in this stock will be closed out soon, normal service will be resumed and you'll get back on even terms or into profit. I'm thinking of taking the plunge myself (as I was at the start of the year at about 70p). It is debt, interest rates and to a lesser extent the effect of covid uncertainty on income that I am mulling over. From the 2019 balance sheet it looks like the group can achieve operating profits of at least $700M a year when firing on all cylinders, maybe a bit more at 2022 prices and levels of pent-up demand (see Spiderman posts), but how much is swallowed by interest on current debt? If less than say $600M per annum then everything is fine, of more than $800M then it is a bit of a problem. Interest payments were $540M in 2019. I don't see the recent legal setback as that much of a problem in the context of these numbers. I'm no accountant though.

Why would they convert to takeover by Scheme of Arrangement if they 'will have 75% before the end of the week, and when the accounts not allowed to hold unlisted shares sell, they will be at 90% or close enough to it that they can buy the rest.'? It is then job done. Why start again with a Scheme of Arrangement, a different process involving the High Court?

I'm not sure about the ' :)'.
This was one I was hoping was heading skywards over the next few years. I'm up on the deal, but not nearly as much as I was hoping for long-term.

On Interactive Investor the offer is open until 23:59 21/12/2021.

... further resistance on my part is useless and detrimental to my interests.