Member Info for Poleaxe

sunpower, perhaps it reached a high on Friday because some wombats mistakenly believed it was the last day to buy and be entitled for the rights (which was of course close today). The sort of people who think they'll make money buying high, as long as they receive those bargain 32p shares.

You don't even get why they'll fall to around 75p tomorrow. You don't get what going ex-rights means.

In the past I'd have thought you must be a troll, but having seen how many retail clients lose money, it's always possible you're for real. Please tell me you don't play with real money.

sunpower: "food for thought. Why do you think the share price hit ATH 243.70 for month of October on 23rd"

Food for thought sunpower, why do you think that's exactly where I shorted, Friday's closing auction? I'm sure other traders did too.

In the stock market, wealth flows from the ignorant to the slightly less ignorant!

Quite right ShareCrow.

The share price says it all. Anyone who thinks it would be trading today over 200p without being entitled to the rights clearly has no understanding of rights issues.

I think a big difference between IAG and RR. is that IAG was via CDI subscription rights. Unlike normal rights, the subscription rights did not have an value if you let them lapse (rather like an open offer).

This is ridiculous. How come the FCA take action on PPI and do nothing to protect inexperienced investors from rights issues?

No Daave. My main data is via ShareScope Pro, plus the free L2 from IG.

That's a good point MJK1.

You also get those who'll sell their RR. shares once they've secured their entitlement to the 'cheap' rights shares.

The psychology around rights is complicated, expecially as a lot of people don't really understand them

simon265, I was thinking in terms of how IG handle CFD shorts. If you use a different broker and/or spreads the adjustments may be made in a different way though. The principle is the same though and you won't gain or lose simply from the rights process.

Not at all simon265 (I assume you mean 'close' rather than 'sell' your shorts).

Presumably you've shorted because you expect the RR. price to go down. You still profit from the falling share price because the nil paid shares will also fall (they'll track about 32p below RR.). Just it would be wrong to assume the short position in the rights will be closed out at zero when they expire on 12th if you haven't closed them before than date.

Ijmac021, if you're short RR. tonight from tomorrow you'll have an additional position in the nil paid rights shares (RRN?). It's a while since I was short on ex-date but I think they book the nil paid shorts as having been opened at zero. Then, if the nil paids were to trade tomorrow at 48p, you'd be sitting at a 160p loss on your short in them per RR. share you're short (which would be in profit by an additional 16t0p or so).

If you run your rights to expiry on 12th and the right issue hasn't bombed then you'll be liable to be 'taken up against. So, if RR. shares are trading at 72p you'll be liable for 40p. Thats's 72p minus the 32p rights price (because someone has to pay 32p to take up the rights against you).

sunpower, exactly, the record date is of relevance to those holding in certified form. It determines who is going to receive the provisional allotment letters. Just because you receive a provisional allotment letter does not mean you are entitled to the rights shares. If you've sold before ex-rights date on 28th the rights belong to the buyer and you need to forward the letter to the buyer. This is what is spelt out on page 1.

Fortunately nominee account holders don't have to worry their pretty little heads about all this forwarding, that handled for them by their broker back office. Yet some still get in a tizz over record dates. In fact, they appear to be the majority here. It's unbelievable!

sunpower, as you have the prospectus why did you skip over page 1 which says:-

"If you sell or transfer, or have sold or otherwise transferred, all of your Existing Ordinary Shares (other than ex-rights) held in certificated form before 8:00 a.m. on 28 October 2020 (being the “Ex-Rights Date”), please send this document, together with the Provisional Allotment Letter (if applicable and when received), as soon as possible to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer will be or was effected for onward delivery to the transferee.."

Rony, do you seriously think you know better than everyone else in the market today, who are buying and selling at about 230p? They're all wrong are they, and it should really be trading today at 78p?

Thanks selecta6, it’s good to finally see a light in amongst the smog of ignorance and stupidity!

I thought I'd drifted into a parallel world, of negative logic and irrational thinking. The idea that shareholders need to be holding between 23rd and 28th is madness and doesn’t remotely stand up to scrutiny. Nor the idea that, even though the shares are still being traded cum rights, neither buyers nor sellers of the shares will be entitled to the rights. If that were true, no-one would trade between 23rd and 28th and the stock might as well be officially suspended.

Why would anyone buy today at 230p without the benefit of the rights, knowing they’ll likely be trading at about 78p tomorrow? It would make no sense. Obviously they’d only be prepared to pay about 78p, unless they get the rights. But why would anyone want to sell to them at 78p today when they won’t get the benefit of the rights either? The market would be frozen.

Traders are now getting set to trade the RR./RRN arbitrage. Where do their profits come from? I think a lot of naïve PIs are blissfully unware of they get played and how they get skimmed.

Rony, part right, part nonesense!

If you're long you may see a 65% drop in value in your RR. position, but you'll be allocated an additional position in the nil paid rights shares which will compensate (or be adjusted in some other way).

There's also no problem shorting. When they go ex you'll also be adjusted to reflect the nil paid rights.

I can see why 80% of retail cleints lose at spread/CFDs. Sorry, but I've reached the end of my patience here now. Adios!

Skyumpie, who in their right mnd would be paying 225p+ today if they were't entitled to the rights? They'd be paying 225p+ for shares worth 75p - 80p. There may be a few crazy people around, but not that many!

I think most people accept that with dividends it's the ex-dividend date they need to be holding at in order to qualify for the dividend, not the record date. Yet somehow with rights they focus on the record date. I think it should be made a lot clearer, but there may be vested interests who don't want that!

Daave, it's the ex rights date that defines whether or not the shares are being traded with the benefit of the rights (cum rights) or without the rights (ex rights), not the record date. That's why they still traded at 240p or so today. The market couldn't possibly sustain that sort of price level if the buyers didn't expect to be entitled to the rights. The rights are worth about 160p per share. If they weren't entitled to the rights, RR. would have been trading around 80p (which is what you'll see from Wednesday).

I've traded rights for over two decades, originally in certificated form. Brokers don't always get it right and sometimes you need to be a little bit assertive with inexperienced customer support departments, to ensure things get processed properly.

Are AJ Bell really going to tell someone who bought today or tomorrow that they're not entitled to the rights? How are PI's expected to cope when brokers can't get it right?

Uncrossed at 226.1p. Low of day.