GDXJ December Reset!16 Sep 2020 23:02
I was asked to redo this in a new thread, so here it is:
Hydro, you're a hero. That's absolutely amazing. You probably remember AM90 and I discussing their free float number and saying it didn't make any sense. Someone even suggested it might be excluding nominee accounts and I said something like I couldn't imagine they'd do that. I still can't believe they'd be so stupid.
I don't think you'll get far by hinting at legal action. They'll have their legal people all over this already, and it will be hard to prove damages. How much would the SP go up if they did it right? No one knows, and they'll have all the evidence of the times when SP dropped when they bought in. Also, you'd have to sell shares to have taken a loss.
My guess is it is too late to fix it, they'd have to check others as well. It's not just us. Mind-bogglingly stupid. I don't expect them to fix it this time. I could be wrong but they probably can't get it through legal and get it done in time. I expect them to fix it for three months from now.
But here's the fun part of it. If they don't fix it this time, what does it mean? It means we're doing it all again in December. It will be based on the SP and free float at the end of November. Let's just think about this.
Their current weighting was based on 2.3 billion instead of 3.3 billion, and a closing price at the end of August of 14.8. Let's conservatively assume the SP is still at 25 at the end of November (with an incoming MRE, does anyone really think that?). So current weighting (0.44%, roughly £22 million buy) is understated, compared to the December weighting, by a factor of 25/14.8 (change in SP) which is 1.69 AND a factor of 3.3/2.3 (free float shares understated) which is about 1.43. That means, all other things being equal (and they won't be), if we just maintain today's price, when December hits, we'll have a weighting of approximately 0.44% * 1.69 * 1.43, or about 1.06%.
So, if they don't get this corrected by Friday (which seems doubtful), what happens in December? Our weighting goes from 0.44 to 1.06%, an increase of 0.62%. Which means that the December buy will dwarf this month's. If those numbers don't change and the ETF is still six and a half billion, we'll be looking at about £35 million in buys in December on top of the £22 million this month.
What this means, if they don't fix it this week, is that December is going to be even bigger. If so, anyone who top slices now, if they don't have to, is absolutely mad. The GDXJ news is going to be rolling in just before the MRE, the actual buy might be after the MRE.
It's not going to be a Happy Christmas for GGP shareholders, it's going to be a Hydrogen Christmas. Looks to me like you did this one, you're the hero here. I sat on the sidelines and said those numbers don't make sense, you pursued it. Well done to you, and I hope you get very, very rich off of the effort.
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