Member Info for Lowbank64

TheBuyer
“Whilst RR does have some manufacturing facilities for specialist parts it relies heavy on purchasing out and subcontract engineering. They haven’t got factories full of machines since the nineties onwards. Largely assembly and test“

RR buys 80% of its parts on the supplier network. The other 20% comes from factories full of machines. Having visited or worked in most of them I think I can say that with some confidence. Worked in purchasing for the last seven years of my career.

Solid snake
It’s great news! Company is shutting down for 2 weeks to save costs and all employees will get their pay cut spread over the year for those 2 weeks lost pay to minimize impact.

Nothing to freak out about.

I read posts like this with interest, I will guess you have never worked in a factory working at the edge of technology. I will just point out many factory managers will be losing sleep over this. The machines in those factories remain powered up 24/7 365 days a year. They do not like being turned off. Very time I have been involved in a start up after a break at least 30% of the machines do not work . I have known machines be down for 8 weeks before being fixed. And that was before Covid when many of the specialist Engineers were still employed. Some specialist have gone bust, I suspect some bespoke machine might never work again. And yes I have known that happen.

Investin value, I personally see a share that’s as volatile as RR is as speculative.
I agree long term the Company is a good buy, having worked their for 23 years.

Since the end of Nov last year my portfolio is up 15% and my best performing investment are up 20% and 25% respectively. None are currently negative.

Currently I would not buy RR and have said so many times, I would be waiting a few months.

Arsenal, interesting use of the word OUR. in your post.
Just been on Sky News.
Expected flying hours this year to be 55% of pre Covid levels, were expecting 70%.
Have 9 billion in the bank, so no cash flow issues.

I still think the Company is over priced in my humble opinion, but for you speculators, could be a good day to buy in or top up.

https://www.thetimes.co.uk/article/rolls-royce-warns-of-higher-cash-burn-vw2sc8mc8. RR warning of higher cash burn.

Even doing 1/2 million people a day, your still looking at 260 days to get everyone vaccinated with both doses.
But there will probably be 10 million who refuse a vaccine, so a bit quicker.
However I think it’s going to be Autumn before holidays start again.

Dogberry, I visited China 3 years ago. I was seriously shocked at the vastness of the high rise apartments on the 3 hour drive from Shanghai to Wuxi. Not a blade of grass in sight, just massive high rise blocks for as far as the eye could see for the whole journey.

That’s one headwind averted, hopefully.

https://unitetheunion.org/news-events/news/2021/january/hope-on-the-horizon-for-rolls-royce-at-barnoldswick-as-unite-strikes-landmark-deal/

It can only be calculated using the closing price on the day of the RI.
Calculation of a Theoretical Ex-Rights Price
The theoretical ex-rights price is usually calculated immediately following the last day of a stock’s rights offering. This calculation makes the stock’s price somewhat arbitrary and potentially more enticing for arbitrage trades throughout the rights offering period.

The simplest way to create a TERP estimate is to add the current market value of all shares existing before the rights issue to the total funds raised from the rights issue sales. This number is then divided by the total number of shares in existence after the rights issue is complete. This calculation results in the value of an individual share after the offering.

Throughout the offering period, all types of investors can speculate on the number of shares expected to be taken by shareholders, but usually, only current shareholders can participate. The basis for speculation in this scenario involves the number of share rights available, the expected demand, and the rights offering price. Companies may have various types of disclosure for this information which can make the estimate even more difficult.

The theoretical ex-rights price (TERP) is often lower than the stock's price before the offering because rights offerings are usually discounted, diluting the stock price.

TUI AG has announced plans to improve its financial resilience in today’s tough economic climate.

Part of the plan is to allow shareholders to buy 25 new shares for every 29 existing shares at a price of EUR1.07 per share. This is called a rights issue and it’s a common way for companies to raise money.

Find out more about rights issues

You don’t need to do anything now.

All TUI shareholders at the end of today will qualify for the rights issue. Once the qualifying point passes, it’s normal for the company’s share price to drop. This is because shareholders will get the rights, which also have a value.

We’ll be in touch with more information from 12 January, once we’ve received your new rights, including how to take part.

I got an email yesterday saying you had to own the shares by close of play Thursday 7th. Do not buy today and think you will get the RI. You will not.

Those of us on draw down pensions have our whole life savings on the stock market, as everyone knows it’s about diversity of your portfolio.
I was lucky my money went onto the market after the latest crash, friends of mine were down over £100k who retired Xmas 2019.
You just havnt to worry about daily ups and downs, look to the long term.
Have 95% in safe (ish) funds.
Then 5% in higher risk funds or shares.

No trader,
Correct as I understand it, was that not the opening price post RI?

How you do that calculation going back over history I think is almost impossible, hence you get a theoretical value.

TimV taken from investopedia.
Theoretical Ex-Rights Price Explained
A theoretical ex-rights price is a consideration for stock issued through a rights offering. Typically, rights offerings are only available for current shareholders and only offered for a short time (approximately 30 days). Rights offerings usually give shareholders the option to buy a proportioned number of shares at a discounted, pre-specified price. The portion each shareholder is allowed to purchase is based on the shareholder's current stake in the organization. The goal is to raise additional capital with preference given to current shareholders.

Stock rights offerings can be a popular event for investors and traders as they may create potential arbitrage opportunities through the rights offering period. Overall the rights offering period can somewhat mitigate efficient market trading as it creates uncertainty over the stock’s price.

Generally, stock rights offerings are tools managers can use in raising capital through the stock. Management may choose to use stock rights offerings to generate additional interest in a company’s stock. Since rights offerings are commonly offered at a discounted price, stock rights usually have a diluting effect on a stock’s price. As such, the TERP is usually lower than the pre-offering market price.

Calculation of a Theoretical Ex-Rights Price
The theoretical ex-rights price is usually calculated immediately following the last day of a stock’s rights offering. This calculation makes the stock’s price somewhat arbitrary and potentially more enticing for arbitrage trades throughout the rights offering period.

The simplest way to create a TERP estimate is to add the current market value of all shares existing before the rights issue to the total funds raised from the rights issue sales. This number is then divided by the total number of shares in existence after the rights issue is complete. This calculation results in the value of an individual share after the offering.

Throughout the offering period, all types of investors can speculate on the number of shares expected to be taken by shareholders, but usually, only current shareholders can participate. The basis for speculation in this scenario involves the number of share rights available, the expected demand, and the rights offering price. Companies may have various types of disclosure for this information which can make the estimate even more difficult.

The theoretical ex-rights price (TERP) is often lower than the stock's price before the offering because rights offerings are usually discounted, diluting the stock price.

TimV,
Because the calculation used is only valid on the night of the RI. That’s because you use the closing price the night before to calculate the value of the company. You then add the value raised by the rights issue and divide by the number of new shares.

Notrader,
My point is stating the share prise pre RI gives the impression it’s easy to get back to those values, they are no longer valid values and do not appear on the graphs any more. As was discussed it almost impossible to work out a comparison price post RI. However it’s likely to be around £1.70-£1.80. I suggest he giving false hope to new investors. That’s my point.

On the question of do I think it will rise, I have stated I think it will before.
I have posted some significant headwinds it faces due to Covid.

The buyer
You aware there has been a 10 for 3 rights issue??

Momon,
It’s all about flying hours.
If your in now stick it out.
Product is good but they need to be in the air. The next 3-4 months will be very volatile on vaccine news around the world.
Once flying starts again, it will reach your target.

Shadow,
I thought it might fall once it hit the serious investors of the S & P , but no still on the up. Apparently shorters have lost over 2.5 million on Tesla. It’s certainly in a much better position than RR.

I have mentioned Tesla before, up 4.5% today.