Member Info for MJK1

It was a 10 shares (@ 32p) for every 3 held rights issue. The exam question is then what’s the average of 3 shares at £13 and 10 shares at 32p.

[(£13 x 3) + (£0.32 x 10)] / 13 = £3.25

Jan 2014 the SP hit the all time high of £13. This is only £3.25 in today’s post rights pricing though. Don’t know where Google is getting £4.28 from!

That is such a naive article, talks about a 90% SP drop from £6.50 to 65p. These two numbers aren’t comparable as there was a rights issue between them. It’s actually a 61% drop as £6.50 pre rights equates to £1.75 post rights.

It does but unfortunately you still see the numerous banal threads that he starts.

Is there any way to also filter the threads they start?

Tom to calculate the equivalent old price from the new, multiply new by 13, subtract 10x32p and then divide by 3. So £1.31 now is equivalent to ((£1.31x13)-3.20)/3=£4.61. All this multiply by 4 or 13/3 is nonsense.

LSE 128p is 448p in old money not 512p

The Boeing 737-MAX doesn’t use RR engines so why would you expect their update to influence the RR SP?

Just looked at my IG account and the value of my RR shares divided by the number I own is 75.15p. However what happens after the market opens, who knows.

It’ll open at 75p but who knows where it will be within a few seconds, minutes or hours.

Because it goes ex-rights when it opens in the morning i.e. share purchases will NOT come with the right to buy 10 shares at 32p for every 3 shares bought.

Because it’s the average of 3 shares at £2.19 and 10 shares at 32p.

Indeed taiz, unbelievable considering the number of times this has been spelt out on here!

I see it as a huge risk to hold a short at close today. The drop to the TERP in the morning benefits neither shorts or longs but from then on, the sight of a share price in the region of 78p is highly likely to pull in the uninitiated who will think there is a huge bargain to be had. I know I wouldn’t risk it!

Jhome, if you buy today you do get the rights to the 32p shares. The clue is in the current share price of £2.30ish. Once they go ex-rights in the morning they will be around 78p.

From market close on 27th to market open on 28th there will be no difference in the profit/loss on any holding even though the share price will drop through the floor. This is because what you loose on the original shares will be equal to what you make on the new 32p shares. What happens after it opens on 28th is down to market sentiment so could go up or down. Shorts will not be making money due to the ex-rights share price drop and longs will not be loosing money.

Do you realise only if it drops below 77p ex-rights will you have a better deal than when you sold at £2.30? It’s currently at the equivalent of 80p ex-rights.

Poleaxe, much of what you’ve written has made a lot of sense however I’m surprised at your comment about putting the farm on an ex-rights price of 80p. Why don’t you put the farm on the current price at £2.40, it’s exactly the same!

If the share price hits £1.50 next year, that’s equivalent to £5.43 now, so a more than doubling of the current SP and why I’ll be taking up my full rights.