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To determine how much you may gain by selling the rights, you need to estimate a value on the nil-paid rights ahead of time. Again, a precise number is difficult, but you can get a rough value by taking the value of ex-rights price and subtracting the rights issue price. So, at the adjusted ex-rights price of $4.92 less $3, your nil-paid rights are worth $1.92 per share. Selling these rights will create a capital gain for you. Be Warned It is awfully easy for investors to get tempted by the prospect of buying discounted shares with a rights issue. But it is not always a certainty that you are getting a bargain. But besides knowing the ex-rights share price, you need to know the purpose of the additional funding before accepting or rejecting a rights issue. Be sure to look for a compelling explanation of why the rights issue and share dilution are needed as part of the recovery plan. Sure, a rights issue can offer a quick fix for a troubled balance sheet, but that doesn't necessarily mean management will address the underlying problems that weakened the balance sheet in the first place. Shareholders should be cautious. People should get advice from professional if they're unsure what to do. Hope that helps

Here we look how to pursue each option, and the possible outcomes. 1. Take up the rights to purchase in full To take advantage of the rights issue in full, you would need to spend $3 for every Wobble share that you are entitled to under the issue. As you hold 1,000 shares, you can buy up to 300 new shares (three shares for every 10 you already own) at this discounted price of $3, giving a total price of $900. However, while the discount on the newly issued shares is 45%, it will not stay there. The market price of Wobble shares will not be able to stay at $5.50 after the rights issue is complete. The value of each share will be diluted as a result of the increased number of shares issued. To see if the rights issue does in fact give a material discount, you need to estimate how much Wobble's share price will be diluted. In estimating this dilution, remember that you can never know for certain the future value of your expanded holding of the shares, since it can be affected by any number of business and market factors. But the theoretical share price that will result after the rights issue is complete - which is the ex-rights share price - is possible to calculate. This price is found by dividing the total price you will have paid for all your Wobble shares by the total number of shares you will own. This is calculated as follows: 1,000 existing shares at $5.50 $5,500 300 news shares for cash at $3 $900 Value of 1,300 shares $6,400 Ex-rights value per share $4.92 ($6,400.00/1,300 shares) So, in theory, as a result of the introduction of new shares at the deeply discounted price, the value of each of your existing shares will decline from $5.50 to $4.92. But remember, the loss on your existing shareholding is offset exactly by the gain in share value on the new rights: the new shares cost you $3, but they have a market value of $4.92. These new shares are taxed in the same year as you purchased the original shares, and carried forward to count as investment income, but there is no interest or other tax penalties charged on this carried-forward, taxable investment income. 2. Ignore the rights issue You may not have the $900 to purchase the additional 300 shares at $3 each, so you can always let your rights expire. But this is not normally recommended. If you choose to do nothing, your shareholding will be diluted thanks to the extra shares issued. 3 Sell your rights to other investors In some cases, rights are not transferable. These are known as "non-renounceable rights". But in most cases, your rights allow you to decide whether you want to take up the option to buy the shares or sell your rights to other investors or to the underwriter. Rights that can be traded are called "renounceable rights", and after they have been traded, the rights are known as "nil-paid rights". To determine how much you may gain by selli

This is not specific to the HOIL Rights issue - it is just information on Right issues per se. Understanding Rights Issues. Cash-strapped companies can turn to rights issues to raise money when they really need it. In these rights offerings, companies grant shareholders a chance to buy new shares at a discount to the current trading price. Let's look at how rights issue work, and what they mean for all shareholders. Defining a Rights Issue and Why It's Used A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. More specifically, this type of issue gives existing shareholders securities called "rights", which, well, give the shareholders the right to purchase new shares at a discount to the market price on a stated future date. The company is giving shareholders a chance to increase their exposure to the stock at a discount price. But until the date at which the new shares can be purchased, shareholders may trade the rights on the market the same way they would trade ordinary shares. The rights issued to a shareholder have a value, thus compensating current shareholders for the future dilution of their existing shares' value. Troubled companies typically use rights issues to pay down debt, especially when they are unable to borrow more money. But not all companies that pursue rights offerings are shaky. Some with clean balance sheets use them to fund acquisitions and growth strategies. For reassurance that it will raise the finances, a company will usually, but not always, have its rights issue underwritten by an investment bank. How Rights Issues Work So, how do rights issues work? The best way to explain is through an example. Let's say you own 1,000 shares in Wobble Telecom, each of which is worth $5.50. The company is in a bit of financial trouble and sorely needs to raise cash to cover its debt obligations. Wobble therefore announces a rights offering, in which it plans to raise $30 million by issuing 10 million shares to existing investors at a price of $3 each. But this issue is a three-for-10 rights issue. In other words, for every 10 shares you hold, Wobble is offering you another three at a deeply discounted price of $3. This price is 45% less than the $5.50 price at which Wobble stock trades. As a shareholder, you essentially have three options when considering what to do in response to the rights issue. You can (1) subscribe to the rights issue in full, (2) ignore your rights or (3) sell the rights to someone else. Here we look how to pursue each option, and the possible outcomes.

That is not correct what you are saying. I was in the Lloyds Rights issue and it didn't go down to the RI price. From memory it did go to TERP but nothing like the RI price. I've not got time now, but will post an article later when i have finished work that explains it pretty well.

172.60 - 174.00 Quite nice actually....lol

Close of business 28th August.

Morning all, Some pretty decent support building at 167 now. http://screencast.com/t/VjjRjnXEuGtZ

Hoil was tipped as a buy in the Shares Magazine a couple of days ago.

So did I .....lol Not. See you tonight - out with shaunC - details later.

I sent them a picture of you in the gym and I think they photo-shopped it! http://screencast.com/t/gKRjdTl86u

"The real McCoy"...........mmmmmmm sounds nice.

164.10

Searcher asked the same question as he did on iii and got a good reply from Elena Saratov that is worth a copy & paste. Point 3 is interesting and pertinent to your question: Question???? does not the stock out on loan not also include investors with long positions as well as short positions?? -------------------------------------------------------------------------------------------------------------------------------------- searcher3, Good question. From my understanding when a trader goes short they sell borrowed shares into the market and the money goes to the CFD provider. When the position is closed the shares are bought back and returned to the broker or fund who lent the shares. Any profit or loss is credited to your account. The CFD provider will pay a small amount of interest to the trader who holds short positions. They also pay a fee to the Broker or fund who lent the shares. When opening a long position no stock is borrowed. The CFD provider buys the shares in the market and charges daily interest to the trader who holds the position. You can see from this model that CFD providers get paid interest from daily loan charges and pay out a small rate of interest on short positions. The cash generated from short positions will help fund the long positions on their books. So in reality they are not employing large amounts of capital. Regarding Shares on Loan or short positions they could be 1) hedging long positions. 2) Taken out on basis that stock price may fall to rights issue price. 3) Be sold in the market today and instead of buying them back in the open market they could use discounted rights issue shares to close short positions. For this to work they would have to be existing holders. All the above is my own personal view. It is possible that I am wrong but beware posters who state I am wrong and give no reasoning as to why. In my opinion employees of SB & CFD providers post on BBs. Good luck to all HOIL holders.

13:01 Re: Update on Spread Bet Magazine ManuDave A couple of sentences from the websites disclaimer (from Elena's link on iii) We maintain a database of stock loan data and use this as a proxy for short interest. However, please note that stock loan activity may be conducted outside of the source systems we obtain data from or by using transaction types other than a stock loan.... ... Stock loan transactions may therefore pertain to a number of different activities, each of which may affect the values published on any given day. For example, stock loan transactions are used to facilitate the following (non-exclusive) list of activities: fails management short selling dividend arbitrage equity financing Users of this website must therefore view the data in conjunction with other available market information.

Has been updated since last night, which shows a large increase in SOOL which is a little bizarre.... http://screencast.com/t/5olB0LT8B8an There is now 20,695,700 out on loan.

http://www.spreadbetmagazine.com/blog Tuesday Aug14 2012 Couple of intriguing short positions opened in Heritage Oil by Oxford & Highbridge Capital Posted on Tuesday, August 14, 2012 at 10:02AM I was intrigued to see this morning that Oxford Asset Management had joined Highbridge Capital Management in opening a short position in Heritage Oil of some 0.6% (1.5m shares) of the float (Highbridge are short 0.3% - 750k shares). What had me scratching my head is the fact that Oxford’s RNS stated the 6 Aug as the date the position was held - this was the day before the shares were actually re-listed which implies they had been short ahead of the suspension or they have there is a mistake with the disclosure date. Being short the stock ahead of a rights issue is a dangerous game as you will of course need to deliver up the nil paids too should you be called on the stock - this is something to watch when the stock does go ex-rights and could provide for a good trading opportunity in the lower priced rights (a sort of short term option on Heritage). So in total they are short 2.25m shares - not a phenomenal amount of stock but still, Heritage shares are quite ‘gappy’ and if they try to cover in a hurry there could be quite a spike in the stock. I caught up with Paul Atherton yesterday for a brief chat and he confirmed that they have been carrying out roadshows with their major institutional investors during the last 2 weeks and that en masse they are supportive of the OML acquisition. He hinted that the placing route as opposed to the Convertible Bond issue (he bond route being more appropriate in my opinion - less dilutive on equity and a cheaper debt cost relative to equity) is less attractive to them and so Oxford & Highbridge could be disappointed here if they expect to close their short posi in such a placing… Looking at the chart below there seems to be good support for the stock in the early 150’s and we continue to believe the stock will be trading more towards 300p than 100p over the next 12 months hence our Conviction Buy call.

Before 10am probably.....lol

Morning mate. The spike to over 200........... you are right it didn't go over - this is known as a fake print. Some chartists say this is an indicator as to where the sp is going in the near future. A chap on the GOO board told me about them last year - GOO had one and I have to say it did sway me on selling some when they got over 7p - they are now 2.98p and currently suspended so it either worked - or was just good luck. They also spike down - as in SLE that had one at 8.25p when it was about 12p - and it did go down to just below 8p before going back up - which is why I didn't buy at 12,11,10,9p. Some people think it's all pants and it means nothing - but it is another tool that is there if you want it. Wrote.....written........who cares!......Besides you & KC of course!!! 'Men in glass houses' and all.......lol Have a good day all.

Ref your shorters question: Firstly, can I prefix this with me saying I'm no expert on shorting, but this is how I see it. Attached is a link to a graph that shows the share price, the stock out on loan & the volume. The stock out on loan is what shorter's have sold ( which they have borrowed) and are hoping for the price to go down, at which some point they will buy them back and give them back to their lender (with a fee/commission ). The current state of play is there's 13,849,100 shares out on loan - or 4.82%. This is the figure from last Wednesday (I think it's always several days behind unless you pay!) The day before it was 4.84% so there wasn't a great rush by shorters to close their shorts on the first day back trading. You will also see that the SOOL went up when we went into suspension. There was debate at this time (on here or iii I can't recall) on how this was possible as it was suspended. It could have been traded on the grey market but I don't think there was a definitive answer. So, buying 13.8m shares over a short period would send the sp stratospheric so I guess things will be done calmly and timely. Also, where would all these shares come from? Heritage has bought back $100m of shares and have treasured them....could those be used? If TB doesn't take up his full allocation of RI shares, he will have to sell some of his holding. If he doesn't it will cost him an estimated $122million for his Rights - a lot of money whoever you are.......could the shorters buy some of these? There will be lots of PI's who will not take up their full rights as they just can't afford it. They may sell a certain % and keep that money for their remaining shares' rights that they haven't sold. As we are having a rights issue with a 40-45% discount , the price is expected to come down (although this doesn't always happen). If it did come down (towards TERP - not the Rights Issue price btw), would it not be better for shorters to wait for the price to come down before they start to buy back on the open market? All a bit guesswork , but as TheSpaniard says, if we have a result on Uganda, or groundbreaking news in Kurdistan, then the price could shoot up and they will have to pay a lot more for their shares when they eventually do buy them back. I guess the shorters have done very well out of HOIL over the last couple of years - so I won't be shedding a tear if they have to give some of that back!......lol. All the above is just my thoughts so don't trade or invest on any thing I have wrote as it might be all tosh!! I Don't think it is, but if someone far more informed than I reads this, please put me right! Sheeesh - turned into a bit of an essay that...apologies! Catch you all tomorrow, and good luck all holders. http://screencast.com/t/Fm3o0sXd

http://screencast.com/t/fwO2haClZ Yea - bit weird today......and the price movements as well.......lol