Member Info for MikeS02

Forest34 - The vast majority of stocks fall following a consolidation, so some of this fall will simply be current investors simply deciding to leave Tui for now. The other point though and probably is more relevant is around liquidity - with many fewer shares in circulation, persistent selling or indeed buying will have a disproportionate impact on the daily intra day moves - said a bit more of this in my other post - guess the key thing to note - it's likely that this becomes the new normal for the share price moves each day going forwards

So as everyone can see, the consolidation happened successfully overnight, which is great! Just wanted to share a little thing, but it may make a big difference to 'nervous investors' out there, of which there are many and probably include myself! One thing to watch is tracking a stock in the mid to high teens £'s is quite different to a low £ stock, ie a movement of 7.5p will now become 75p etc etc and whilst I realise this is basic common sense, please trust me when I say, you'll feel like you're on a roller coaster some days with the potential moves up and down. Also with now only c178 Million shares in circulation, this will also likely drive bigger intra day moves, so again, can only suggest holding on to your hats through to and including the rights issue

Forest34 - depends which broker holds your shares - Hargreaves Lansdown for instance put out a message yesterday that holders of Tui stock wouldn't be able to trade until next Tuesday, 28th Feb - others will have different timelines, so please simply check

I currently don't own Tui stock, but have been interested in it, in the last several weeks and am keeping close to developments, as I believe it could be one of those rare stocks that could actually 'fly' in 2023 - excuse the pun!
I also know that some if not many long term investors have lost out big style and as such, I'm certainly not trying in any way to rub salt into wounds with regards my Q's as below - I was a long term investor in Natwest, so assume you can imagine my rollercoaster time as a shareholder too!
As such, I do have some technical Q's about the up coming rights issue and if anyone has the knowledge to share I be hugely grateful - my understanding is that the Tui rights issue will be a renounceable rights scenario, ie that if an investor decides they don't want to take up the rights offer, they can sell them on the open market - if true, then my Q's are:
1. How would an investor who has decided not to take up the rights, then sell to the open market - my assumption is that Tui or their registrar will enable that to happen?
2. How would myself as a new investor get access to any renounceable rights sold on the market - assumption would be through the registrar, or would this be broader and through any and all brokers?
3. If a new investor bought renounceable rights - assume that the 'status' of these are exactly the same as any other share in the company?

It's hugely difficult to find any information on the above at all and not quite sure why - finally, my understanding would be that the renounceable share price would be pretty much in the middle of the current price and rights offering price - would that be correct too? ie current share price £20 - rights issue price £11.20 (taking the last rights issue reduction of approx 44%) and therefore renounceable shares would be around the £15.60 mark or is that too simplistic?

Hugely appreciate any insight

Whilst I understand that each broker will have a slightly different way of dealing with the consolidation and particularly with regards timing etc, you have to believe that some will be quicker than others. The other point is that I believe that consolidated shares will be available to trade tomorrow, 24th and clearly with many brokers not enabling share dealing, then there is quite a risk I believe of significant share price fluctuation - as I say, I'm sure this is part of the course, but until middle of next week, it feels like shareholders are running in the dark?

They do come Friday morning, but the value of each share is x10 based on the closing price Thursday, so you don't lose money, which I guess for all of us is the most important thing eh?

Huge thanks for clarifying - can all be a bit of a minefield eh

TT - I agree, but of course as we all know, when the analysts get a little 'techy', they start to downgrade the stock and once that happens, the SP will indeed be negatively affected!

Just coming back on some Q's as below and will try and help - with regards the next rights issue - companies tend to offer a deep discount to the share price at the time to help ensure that as many are taken up as possible and as a little sweeter to the current shareholders - of course, it's only a sweetner, if you can afford to take up the rights issue - any left go onto the open market - Tui did a rights issue back in 2021 and there, the discount was 44% on the share price at the time, so expect something similar this time around and of course, it's this prospect of dilution that tends to get investors to cash in ahead of the rights subscription and then re-enter the market afterwards, if that's what they would like to do - believe that both Mary and myself have given some suggested figures in other posts made, but as always, clearly our views only and could be significant changes either side of our numbers. With regards the current low price - clearly this is following what was in effect t a German government bailout for the company following covid and it's this debt that the company will now largely clear with the rights issue and share dilution - for interest they do say that this will be the last rights issue associated with their debt, so on-going they will be paying it off through profits etc, which should allow a bit more stability with the SP - so the fact that investors knew that the company had to deal with its government bailout at some time meant a significant drag on the SP - once this has been paid off and with significantly improved profits delivered for 2022/23 - the words of the CEO, not me, then my best guess is that on the other side of the rights issue and delivery of the profits according to the CEO, should enable a decent run upwards for the stock - the one downer of course will be if a significant recession hits later this year, which of course could then be a little problematic - a much shallower recession or even better, no recession at all, would undoubtedly be good for the stock.
So hope this helps a little and please remember that this is only my thinking and I could be significantly off reality
My final point to share - it really wouldn't surprise me if TUI announce on Friday once the consolidated shares start to trade, the details of the rights issue!

halfful75 and others - if it helps, whatever the value of your shares are at the close of the markets this Thursday will be the value of your shares when the markets open on Friday morning and following consolidation.
This is stage 1 of the two stage process that Tui has announced.
It's stage 2 which is the rights issue, which is likely to dilute your holding and based on whether you can take up the rights when it's announced and at the price announced and of course for stage 2, you'll therefore need access to further monies, which for most people is the tricky part

Hi Mary - Not sure if you were asking someone else (Scally?), but if it helps, please see link below and it's on slide 3

https://www.tuigroup.com/damfiles/default/tuigroup-15/de/investoren/7_HV/2023/TUIAGM2023_Further_information_agenda_item_6.pdf-e982ab85ec899700ce641200eab13f2a.pdf

Mary and all - Again like many, find this particular commentary fascinating and of course none of us know exactly how things will pan out, but we all - like the board I'm sure - want to get on the other side. In the capital announcement, they do make the point that the 'max' payment will be capped at 2 euros (20 euros consolidated), so you have to think that even based on today's price, they are in 'the zone' to get the deed done - assuming that if the sp gets above £20, then the dilution will be smaller - is that right?

Banburyboy - Many thanks for your thoughts back - really appreciated.
Just sharing one thought ref renting vs buying and again, please don't shoot the messenger, just thought it might help with the debate.
Whilst I totally get the sentiment about wanting to own a home etc etc, there is a fundamental 'win' with renting vs buying and that's with regards to the fact that if you rent and money gets tight, you know that within a few months - dependent on the lock in period - that you'll be able to move somewhere cheaper and more aligned to your budget - also of course with renting you have no maintenance bills etc which lie with the landlord, although this point favours new homes that are well built! With a mortgage, you're locking you and your family into a lifetime of payments (for most people through to retirement at least and unfortunately for some through retirement too) and whilst you can fix the rate, if your finances decrease markedly eg with the cost of living crisis; redundancy etc, you still have to pay your mortgage and for many people this in itself is a scary thought - so whilst I understand wholeheartedly the 'maths' of renting vs buying, I do think for many, the broader thinking about the 'lifetime' of a mortgage vs flexibility of renting can play a big part

Banburyboy,
Many thanks for your thoughts, although please accept and respect other thoughts too.
If it was SO SIMPLE as you quote, your're sitting on a gold mine and enjoy your money.
As I say, we're all entitled to our opinions and for some who have just started off investing, surely a range of views is important, both on the downside and upside - all I'm sharing are my views having been in the market for 20 years or so - that's all

Agree Mary, think it could go either way, although from history, suggests the SP will weaken somewhat after the consolidation - also whilst I strongly believe that more institutional investor types will start to buy the stock at this higher price, they certainly won't touch it with a barge pole until the share dilution is done and dusted and like you, I hope it's done in the next month or two and before the Half Year results in May - back in 2021, they offered share rights at a 44% discount to the share price at that time - let's say the share price remains pretty static at the current price of £17.50 (consolidated), then applying a 44% discount would take the diluted share price to £9.80 and let's say that this represents half of the consolidated stock in circulation, then the price after dilution of bringing in these new shares would be around the £13.65 per share mark and it's this 'fact' that I believe will keep potential investors on the sidelines until the deed is done and hence like you, the sooner the better and whilst markets appear fairly sanguine - all of this said, I strongly believe that once this dilution has been enacted, that the SP will rise strongly as the year progresses and underpinned by strong profit growth, which is what the CEO has promised!

Hmmm - Maybe not so fast - Sunday Times reports today on its front page that it's division in Jersey is facing an investigation from regulators over potential breaches of anti-money laundering rules - you simply couldn't make this stuff up eh - expect a reaction in the market

50%+ of PSN customers are FTB's - how on earth does a move below 4% which is still DOUBLE the rate just 12 months ago constitute a rate as enticing - simply don't believe it is - what none of you say below and of course the papers don't either in the clips provided is this is ALL against the backdrop of a cost of living crisis and with inflation still running hot at 10% - so surely the Q is this - WHY would I as a FTB want to take up a sky high mortgage when inflation is still 10% AND with all of my bills still going up sky high, together with food inflation running at 16% - I get your enthusiasm, but believe it's misplaced and it will show in the results on the 1st March - as I said in a previous post - buckle up!

Just a bit of an update and hope it helps - was reported late afternoon by Bloomberg that Tui had appointed a slew of top banks today to deal with the capital increase and rights issue. So we now know that the 10 for 1 will happen next Friday, 24th February, so you have to think that now with the major banks appointed and onboard, that the capital increase/rights issue could happen a month or two after that - the Half year results are the 10th May, so assuming it will certainly be done and dusted by then - pending any significant market moves of course - hope this helps

Corryvreckan1 - It stated in the consolidation document debated and passed at the AGM that this one would be the last capital raise for paying back the German Government - you're quite right though - if things turn ultra tough again, then they may well come back for further monies, but on the optimistic side, let's believe there will be a strong 2023 etc which will fill up the coffers

Hi MaryBr and All, Actually found the information with the dates etc, so please see link as below and hope it helps - HUGE thanks Mary again for sharing and best

https://www.eqs-news.com/news/uk-regulatory/tui-ag-results-of-annual-general-meeting-capital-reduction-and-share-consolidation/1755591