Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
So tempted to up my holding and go all-in here ... what do you good people think the chance of a share buy-back scheme is, as opposed to a dividend?
IMO regular share purchases by the company would rocket the SP here ... thoughts?
caselogic: "we dont know what the placings are for....just vague working capital comments.....we dont know where it goes........could be straight into AP's bank account....no idea......"
that is a bare-faced lie ... the proceeds are paying for 2 Atlas conversions and costs associated with the setting up of the funding deal, this is explicitly detailed in the RNS.
I'm also very unhappy about the placing, but libellous accusations, such as yours, dont help.
From the prospectus:
"4. FURTHER PROCEDURES FOR ORDINARY SHARES WHETHER IN CERTIFICATED FORM OR
IN CREST
4.1 If I buy Ordinary Shares after the Record Date will I be eligible to participate in the
Rights Issue?
If you bought Ordinary Shares after close of business on the Record Date but prior to 8:00 a.m. on
28 October 2020 (the time when the Existing Ordinary Shares are expected to start trading ex-rights
on the London Stock Exchange), you may be eligible to participate in the Rights Issue. If you are in
any doubt, please consult your stockbroker, bank manager or other appropriate financial adviser, or
whoever arranged your share purchase, to ensure you claim your entitlement.
If you buy Ordinary Shares at or after 8:00 a.m. on 28 October 2020, you will not be eligible to
participate in the Rights Issue in respect of those shares"
Why cant they give a flipping straight answer!
Not good enough IMO.
"Whether the rules are good or bad is not the issue, just follow them."
History tells us that's a VERY dangerous road to travel.
If we're doing songs, I think House of the Rising Sun might be more appropriate for Kev.
68p early doors, slight pullback, 72p late afternoon. GLA!
Excellent news!
Btw, people should STOP replying to posts with deliberately negative and misleading titles ... this is a well known de-ramping trick.
LIMITLESS
And I'm back in the blue! Gotta love averaging down! :-)
This is how I think the Morgan Stanley cash-swap deal works.
Its mostly conjecture and guesswork on my part, and this is just for fun.
If there's anyone on here who knows better, Id love to hear your thoughts.
Say you're a shorter with a £1M exposure on the short side. With cinemas opening, you'd like to exit but you're scared that you will exert upward pressure on the price and lose your profit. How to exit and lock-in the profit you already have?
In a cash swap deal, one side agrees to pay a fixed interest rate, for a given time period, usually LIBOR + x%, the other side agrees to pay the difference in share price in the same fixed time period.
(In the example below I've assumed LIBOR =0% to make things simpler)
You agree a cash swap with MS to the value of £1M, you are liable to pay them LIBOR + 10% on £1M, in return MS agree to pay you the rise in SP of £1M worth of shares.
The shares are actually owned by MS.
If SP rises by 12%, you are liable to pay MS 10%, MS are liable to pay you 12% - ie MS owe you 2% of £1M.
BUT …
MS shareholding has risen by 12%, so they are 10% up (12-2)
Your short profit has reduced by 12%, so you are 10% down (2-12)
If SP falls by 12%, you are liable to pay MS 10%, MS are liable to pay you -12% (ie you owe them 12%) - ie you owe MS 22% of £1M
BUT …
MS shareholding has fallen by 12%, so they are 10% up (22-12)
You short profit has risen by 12%, so you are 10% down (-22+12)
Both parties have limited risk/reward based on the agreed %rate of the swap deal.
What are the risks of this deal?
Although both parties have known risk whilst the deal is in place, neither party wants to be caught on the wrong side of it once the deal ends. ie. shorter doesn't want to be left with his short position still open at the end of the deal if the SP has risen substantially, because at that point his remaining short is once again exposed to the full SP.
Likewise MS doesn't want to be left holding shares at the end of the deal if the SP has dropped substantially as his guaranteed 10% return is no longer in place, and they're forced to sell at a loss.
At any point the deal is in place both parties have known and limited risk/reward so I would imagine the swap deal is time based, the understanding being that the shorter is expected to have exited his position by xx/xx/xx. Once the deal has ended, MS would expect to liquidate their holding immediately (if they haven't already done so), as they no longer have a guarantee against a sudden fall in the price.
It is guesswork, that's true.
I don't have any real understanding of how the short register is managed and the rules governing the disclosures.
It is clear though that the number of shares 'on loan' by Norges changed 3 times … I'm not sure what other purpose on loan shares would be put to?
If I get chance later (working atm) I may post some details on how I think the cash swap works.
Basically, they increased the amount on load (shorter increase)
Next they decreased the amount on loan (presumably shorter bought back and returned to lender)
Then increased amount on loan, roughly back to the original position (same or different shorter opened a new position?)
These need to be read in conjunction with the Morgan Stanley RNS, as I believe their cash-swap is in place to allow shorters to exit their position with a guaranteed risk profile.
Overall, I judge in neutral based on the numbers, but positive based on the fact that shorters now have the mechanics in place to exit in an orderly manner once they judge the time is right, which should see a steady price increase rather than spikes and troughs.
All IMHO only, no advice given.
FWIW I think the MS involvement is positive.
I believe the cash/equity swap arrangement is a hedge mechanism for the shorters, allowing them to exit at a guaranteed price. (Being SP at commencement of swap deal + xx%)
The value to MS is that they stand to gain the fixed xx% plus any rise in SP once the equity swap arrangement is closed.
If SP should fall significantly, shorter is protected by the deal, whilst MS is left with overvalued shares to sell ... I dont believe MS would enter into the deal if that risk is feasible.
If you look at PMO RNS's during May-Jul you may get some idea what I mean.
I took about 25k out of BOO this morning at a smallish profit and bunged it in here @44p ... very happy with that call. :)
On another site I can see a third transaction for a slightly different quantity, 5,847,266 at the same price 0.675.
Suspect the initial and cancellation were due to wrong quantity entered.
Price rose at the time of these transactions (11:37), so certainly a buy.