DOOM: RR down 61% for the day.

[BlasterBates]

Makes sense now... pardon me if I am not getting this right.
But based on the price at 27 Oct: 219p and 1.94 bil outstanding shares -> 4.248 bil market cap
They've increased the number of shares by 6.4 bil so now there will be 8.34 bil shares. (hopefully I have found the right figures).

Based on the new number of shares(8.34 bil) and the old valuation(4.248bil) the share price should be 50.94p
Based on the new number of shares(8.34 bil) and the valuation at 30th of Sept (based on which the issues de 32p shares) -> price is 130.6 with 1.94bil shares => 2.53 bil market cap. Which should be 30.37p per share with new 8.34 bil shares.

Assuming you owned £10k in shares. That would have been about 7657 shares at 30 sept. 130.6p each. You are now given the option to buy 10 shares for each 3 that you have at 32p. => you can buy 25520 shares at 32p totalling £8166.5. Now you have 33177 shares at a total cost to you of 54.75p.

To conclude, to be able to keep the same percentage of company holding and dividends you have to stump up 81.66% of what you currently hold. The average cost to you will be 54.75p while if we assume the 30th of Sept £2.53bil market cap and the new 8.34 bil shares that would be a 30.37p share price.
There is the influx of capital that they could use to theoretically pay debts, make investments but at same time pay bonuses and running expenses.
Now it is a 85p but what makes people think it will not reverse to 30-40p in a few months or even 30 as the 30 of sept market cap calculation shows?

Do people trust that much that the company will be using the money how it should and not burning through it?

I only see insecurity to borrow from financial markets and investors being screwd...

You don't have to stump up anything your broker will simply sell the rights you don't take up on the market and you get cash back. You can also buy enough shares so that the cash back is equal to what you pay out, keeping your shareholding the same.

Generally on the day of a rights issue there will be no movement in share price, that will have happened when the rights issue was announced.

[Zigenare]

Did they do another share split?!

Down 20%+ in the last 48 hours?

Put down your copy of the "Naked Trader" and learn how to do some proper research.

[scooterscot]

Did they do another share split?!

Down 20%+ in the last 48 hours?

[GigiBronz]

The price isn't really down, they've simply issued new shares. This particular rights issue is a mixture between a stock split and a rights issue. The loss on existing shares is simply negated by the gain on the new issued shares to existing shareholders, those that don't subscribe receive cash equivalent to the loss they incur on their holding.

Shares are actually doing reasonably well.

Makes sense now... pardon me if I am not getting this right.
But based on the price at 27 Oct: 219p and 1.94 bil outstanding shares -> 4.248 bil market cap
They've increased the number of shares by 6.4 bil so now there will be 8.34 bil shares. (hopefully I have found the right figures).

Based on the new number of shares(8.34 bil) and the old valuation(4.248bil) the share price should be 50.94p
Based on the new number of shares(8.34 bil) and the valuation at 30th of Sept (based on which the issues de 32p shares) -> price is 130.6 with 1.94bil shares => 2.53 bil market cap. Which should be 30.37p per share with new 8.34 bil shares.

Assuming you owned £10k in shares. That would have been about 7657 shares at 30 sept. 130.6p each. You are now given the option to buy 10 shares for each 3 that you have at 32p. => you can buy 25520 shares at 32p totalling £8166.5. Now you have 33177 shares at a total cost to you of 54.75p.

To conclude, to be able to keep the same percentage of company holding and dividends you have to stump up 81.66% of what you currently hold. The average cost to you will be 54.75p while if we assume the 30th of Sept £2.53bil market cap and the new 8.34 bil shares that would be a 30.37p share price.
There is the influx of capital that they could use to theoretically pay debts, make investments but at same time pay bonuses and running expenses.
Now it is a 85p but what makes people think it will not reverse to 30-40p in a few months or even 30 as the 30 of sept market cap calculation shows?

Do people trust that much that the company will be using the money how it should and not burning through it?

I only see insecurity to borrow from financial markets and investors being screwd...

[Whorty]

Anyone knows what that is about?
News seem to be whoosh whoosh

Don't feel bad about not understanding what a Rights Issue is, and why/how it impacts the share price as our resident investment expert, Scooty, had no idea either.

Maybe Scooty needs to call his Mentor and ask for a refund

[Scruff]

Errr. They make engines for aeroplanes. And nobody wants to fly.

And for ships On Her Majesty's Service.

[BlasterBates]

Shame you missed the market spotting that in March...

Have they fixed the Dreamliner engines yet?
Or got rid of 7 layers of useless middle management?

There’s lots wrong at RR.

The price isn't really down, they've simply issued new shares. This particular rights issue is a mixture between a stock split and a rights issue. The loss on existing shares is simply negated by the gain on the new issued shares to existing shareholders, those that don't subscribe receive cash equivalent to the loss they incur on their holding.

Shares are actually doing reasonably well.

[Lance]

Stock market is forward looking not backwards. I could have told you that back in June.

Shame you missed the market spotting that in March...

Have they fixed the Dreamliner engines yet?
Or got rid of 7 layers of useless middle management?

There’s lots wrong at RR.

[AtW]

Rights issue at 32 pence. Got the notification today and subscribed fully to my allocation.

You dirty kapitalist Korbyn supporting sokie!

[fullyautomatix]

Rights issue at 32 pence. Got the notification today and subscribed fully to my allocation.

[eek]

Anyone knows what that is about?
News seem to be whoosh whoosh

£2bn rights issue at below market price creating a new market price.

[AtW]

There is a rumour that Pooter got a poot on them.

[GigiBronz]

Errr. They make engines for aeroplanes. And nobody wants to fly.

Stock market is forward looking not backwards. I could have told you that back in June.

[Lance]

Anyone knows what that is about?
News seem to be whoosh whoosh

Errr. They make engines for aeroplanes. And nobody wants to fly.

[GigiBronz]

Anyone knows what that is about?
News seem to be whoosh whoosh