TAIL SWALLOWING AND MOREY1 Apr 2023 15:10
Very difficult to decide just how to handle this rights issue for me. It all boils down to how you see TUIs future over the next few months . They hope to reduce their debt substantially with this rights issue which will take their debt down to around pre covid levels. That's if all the rights are taken up of course. The cost to take up a right with Halfax is £4.86 as of my discussion with their corporate department yesterday taking into account yesterday's exchange rate. This can slightly change of course as exchange rates change. TUIB closed yesterday at £1.07 after a volatile day , dropping into the 80ps at one point. What happens to it Monday is unknown. So at the moment I could take my rights at £4.86 compared to a current sp of around £6.23. If I sell my rights someone then has to buy them for at least £1.07 each plus they will then have to pay the £4.86 to take each one up making a total they will have to pay for each rights share is at least £5.93 as of today compared to the current sp of around £6.23. Not a massive difference between the sp and the purchase cost of new rights issue share and this price difference could reduce with the volatility of trading next week. I am not confident all rights will be sold. Thinking about tail swallowing. Most people probably know about tail swallowing but just as an example of the result of doing it ---- At todays TUIB level of £1.07 , anyone who has 1100 rights would have to sell 900 of them to raise enough to purchase the remaining 200 ( give or take a little ). So selling 900 would give you £963 which would give you enough to purchase the remaining 200 (you would have to add between £1 and £2 ). So you could acquire 200 shares without cost. This calculation works for the TUIB price of £1.07 and the calculation will change slightly as the T UIB price alters. But currently you have to sell 9 eleventh of your entitlement to raise enough to purchase the remaining 2 eleventh. Might be of interest to some on this board. I am not fully confident in Tuis situation at the moment considering this cost of living of living crisis and how this will bite into people's pockets and how it will affect their holiday choices so I will assess the situation over the next few days before I decide my choices as I am very reluctant to invest more in Tui but need to do something to protect my current investment. At the moment I have elected to take all my rights with Halifax but this can be altered right up to the 11th of April. Various choices of what to do ---- Tail swallow and add 200 shares to my current Tui stock at no cost , sell my cureent stock to take up my rights in full , combination of both , sell up and get out or bite the bullitt and invest more to take up my rights. Hmmmm I wonder how the sp is going to go in the next few months? Can anyone lend me a crystal ball please? Good luck everyone invested.
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