Member Info for Poleaxe

POSTI, we've been here before. The 32p price would have been set following negotiations with the underwriters (who got paid £55m). What price the rights gets set at makes no difference to shareholders who take them up or tail-swallow - it works out the same to them. However, a lot of people seem to get wound up about the rights price and are probably more inclined to take them up if the price is lower, but that's psychologically taking over and not logical.

Rights issues are simply the company begging investors for more money. They don't really give any special deal to loyal shareholders.

It feels like the rump placing is done. Anyone hazard a guess at the price? 90p-91p? Should know in a while.

I guess you're right Ratty. There was only about 90 mins on 28th Oct where you could have got a better price than you could have got now.

More sophisticated investors probably locked in their rights gains by shorting into the vaccine rise on Monday. Just because the shares haven't appeared on your account doesn't mean you have to miss out on the market timing.

"Too early to make that call IMHO. Plenty of RI holders aren't able to sell yet."

Which is the point I made several days ago regarding investors taking up the rights.

Why would experienced investors be keen to sell at these levels when they could have got a better price selling the rights nil paid a couple of weeks ago? If you took up the rights you had to be willing to commit additional funds and risk being locked out of market for several days (as you see now). I think it only makes sense to inexperienced investors to take up the rights and immediately sell for a 'quick profit on 32p'.

Is the short percentage you're using based on the existing RR. shares and 1.9bn shares in issue? Or does it include shorts on the rights shares and 8.4bn shares in issue?

If it's solely based on the existing RR. shares then it's likely to be rather an inaccurate reflection of the current percentage short, based on 8.4bn shares in issue and could now be significantly lower.

Nah, when it comes to RR. I'm a regular trader of RR. and rights in general. I'll swing short and long. I've no emotional attachment either way. Too risky for me at the moment as a longer term investment. For a serious investment I’d prefer less potential upside for lower risk. Each to their own.

FYI, auction triggers at 94.5p

Looking at where the SP is now (sub 100p) you'd have been at least as better off selling the rights for 68p on 28th Oct. And we've had the vaccine news since then to pump them up.

I'm not saying they won't rise from here (I know no better than anyone else), just the current price isn't that great for those who elected to take up the rights. Not yet anyway.

I'd expect all the 375m to be placed this morning and RNS to confirm, with placing price. No need for them to be dripped out or underwriters left with any (that would only happen if RR. were trading around or below 32p).

When there's the news tomorrow morning on the rights subscription I expect the vast majority of the rights will have been taken up. I'm sure many will interpret this as an indication of how keen existing shareholders were to take up their rights. This may or may not be the case. You don't know.

Bear in mind that where holders decided to sell their rights shares nil paid, those shares got bought by someone. So it could be them, or the subsequent holders if they sold them on, who decided to take up the rights. After all, the alternative would have been to let them lapse and take their chances on the price of the rump placing tomorrow.

It's really shocking that even a broker doesn't understand that it's the ex-date that determines entitlement to the rights issue. Sadly it doesn't surprise me. To qualify you needed to be holding at close on 27th Oct.

Didn't it seem odd to you that when you sold the shares on 26th the price hadn't dropped significantly, like it did on 28th? You thought you'd qualify for the rights issue without suffering a fall in value of the original shares?

I'm glad I've not visited here for several days. Just seeing the stuff posted today is enough to drive any sane investor mad.

Sorry solar987, I posted in haste earlier as I was just popping out.

I should have said the rights rump gets placed as fully paid RR. shares. You then received your share of the proceeds, after deduction of the 32p and minor costs.

However, presumably you could still sell your RRN rights nil paid now and up to 11th. e.g. you could have got over 40p for them this morning. You could then use those proceeds towards buying the RR. shares (currently 68p offer price). In other words, a net cost to you of 28p. Does it make you wonder why people are so keen to take up the rights at 32p?

I meant probably WILL get done at low price on day.

solar987, you haven't really missed out. If you think RR. are a good investment you can still buy them now. As I've tried to explain many times, this is no more expensive than committing to take up the rights here (because when you take you the rights you forego what you could have got selling them nil paid).

As for the lapsed rights. All the lapsed rights will be lumped together and sold off in the rump placing on 12th. Some days later you'll be credited with your share of it (less some minor costs). The placing probably won't get done at a low price on the day, but shouldn't be too bad.

I don't think there's mention of the Bombardier case in the prospectus. There is mention of other bribery and corruption issues, e.g. the Brazillian.

A quick Google
https://uk.reuters.com/article/uk-bombardier-results/canadas-bombardier-faces-uk-bribery-probe-over-plane-sales-idUKKBN27L2D6

I wonder is the same traders will be off sowing confusion at AVV now!

Great posts Vivv.

Those who think they are long term investors but agonise over every intraday price move is kidding themselves IMO. You're either a day trader or very insecure about your investment decision.

If you're a longer term investor you should have done some decent research on the company and not just be buying because it has a strong brand name, has national strategic importance and previously traded higher than it does now. These are not enough to give downside protection for ordinary shareholders.

If you're a trader or a longer term investor you ought to understand the mechanics of rights issues.

If you're a trader you ought to have a decent knowledge as to how the market works and an idea as to how and why prices may move during the rights process.

jedclampit, amongst other places (e.g. all the holdings RNS) it's spelt out on page 11 of the prospectus:-

"As at the Latest Practicable Date, there were 1,930,995,313 Ordinary Shares in issue."

"Following the passing of the Ordinary Resolution at the General Meeting and pursuant to the Rights Issue, the Company will issue up to 6,436,651,043 New Ordinary Shares"

You should be able to work that out from the 10 for 3 basis. In other words, there will be 13/3 times the number of shares as there were previously.

There then follows 43 pages in the prospectus on the investment risks the company has identified. As a potential investor, it tells me a lot more about the state of the company than I'm ever likely to read here!

Is Shorttracker looking at RR. or RRN or both? If it's only RR. this now only represents 23% of the total shares in issue. Also, shorts in RR. might increase with traders doing a RR. short / RRN long arbitrage?

Might not another reason for the selling be that people are simply selling their rights, either in full or to tail swallow?

Have you thought about how selling pressure on the RRN rights gets refected in the RR.? Arbitrage?

Who knows? I don't.