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Post by oldman on Sept 18, 2014 8:04:24 GMT 7
Price has now settled to 0.1ct to buy and 0.2cts to sell with billions of shares on the buy side and hundreds of milions on the sell side. When the 27.3 bil rights shares are issued tomorrow, I would then not be surprised that tens of billions of shares line the sell queues. I doubt that there will be many takers at 0.2ct when that happens. As time goes by, I will not be surprised that it will go down to 0.1ct as some punters start licking their wounds. Yes, I think the game is over. Not surprisingly, there was acceptance for only 7.8 billion right shares which according to the company, represented a subscription rate of 52.9%. Interestingly, in an earlier announcement, they stated that there is a max subscription of 86.25 billion shares.... if one uses this number instead, the subscription rate falls to 18% after considering the 1 for 1 bonus shares. There were 6.19 billion excess rights application and these will all be fulfilled. The company stated that it expects 13.65 billion rights shares to be issued. As there is a one for one bonus share, total number of new shares issued will be around 27.3 billion. According to the company, this represents a take up rate of 94.85%. Actually, this is not a bad result for the company as it managed to raise $40.65 mil. As for the investors who took up the rights and applied for excess rights, only time will tell. infopub.sgx.com/FileOpen/SeD-Ann-ResultsofRightsIssue_18.09.14.ashx?App=Announcement&FileID=315154I will not be surprised that the shares fall to the 0.1 - 0.2cts level after the 12th of Sept. With 1.23 bil shares in issue, there may be up to 29.5 bil new shares issued, though I very much doubt that the take up rate will be that good. The company announcement yesterday stated a rights issue of up to a max of 86.25 bil new shares but I think this assumes that investors will exercise the existing warrants at 1ct and 1.1ct when the shares are trading at between 0.3 and 0.4cts. I am also interested to see if SGX will approve the warrant adjustments as frankly, I don't recall this happening in our exchange in such a dramatic way. Guess, if it is approved, there will be many others folllowing this example.........
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Post by oldman on Sept 24, 2014 8:44:17 GMT 7
Another good example of the power of supply and demand is the price of these W161230 warrants. According to the SGX website, these warrants have an exercise price of 1ct when the mother share is currently trading between 0.1 and 0.2cts. The warrants however are trading between 0.3 and 0.4cts with 9.5 mil to buy and 8 mil to sell. Yes, there was an earlier announcement suggesting that these warrants may be adjusted both in terms of number of warrants and exercise price but so far no further announcement has been made even though the rights issue had been completed a few weeks ago. Saying all that, as these warrants are likely to be tightly held, one should not sell these without having the physical stock.... ie, one should not short these warrants.
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Post by oldman on Sept 25, 2014 5:14:15 GMT 7
Yesterday's announcements shed some light on the excess rights application. Mr Chan's direct and deemed interests together amounted to 97.11 mil shares before the rights. With a 24 for 1 rights, he should then have an additional 2.33 bil shares. Instead, he now has 8.5 bil shares. Hence, he must have oversubscribed for 6.07 bil shares. Toh Soon Huat's combined interests total 56 mil shares before the rights. With a 24 for 1 rights, his total number of shares post rights should be 1.4 bil shares. In the announcement, he has a total of 2.291 bil shares. Hence, he must have oversubscribed for 890 mil shares. Together, they oversubscribed for 6.96 bil shares. As it was structured as a 12 for 1 rights with a 1 for 1 bonus issue, the actual number of shares that the both of them oversubscribed is actually half of the total amount.... ie, on paper, they would have oversubscribed for 3.48 bil shares as the other 3.48 bil shares were the result of the 1 for 1 bonus issue. Earlier announcement stated that there were 6.17 billion successful excess rights applications. Hence, they accounted for 56.4% of the excess rights application. Best just to watch from the sidelines. infopub.sgx.com/FileOpen/_SeD-Form1_CHF.ashx?App=Announcement&FileID=315873infopub.sgx.com/FileOpen/_SeD-Form3_TohSoonHuat.ashx?App=Announcement&FileID=315653Not surprisingly, there was acceptance for only 7.8 billion right shares which according to the company, represented a subscription rate of 52.9%. Interestingly, in an earlier announcement, they stated that there is a max subscription of 86.25 billion shares.... if one uses this number instead, the subscription rate falls to 18% after considering the 1 for 1 bonus shares. There were 6.19 billion excess rights application and these will all be fulfilled. The company stated that it expects 13.65 billion rights shares to be issued. As there is a one for one bonus share, total number of new shares issued will be around 27.3 billion. According to the company, this represents a take up rate of 94.85%. Actually, this is not a bad result for the company as it managed to raise $40.65 mil. As for the investors who took up the rights and applied for excess rights, only time will tell. infopub.sgx.com/FileOpen/SeD-Ann-ResultsofRightsIssue_18.09.14.ashx?App=Announcement&FileID=315154I will not be surprised that the shares fall to the 0.1 - 0.2cts level after the 12th of Sept. With 1.23 bil shares in issue, there may be up to 29.5 bil new shares issued, though I very much doubt that the take up rate will be that good. The company announcement yesterday stated a rights issue of up to a max of 86.25 bil new shares but I think this assumes that investors will exercise the existing warrants at 1ct and 1.1ct when the shares are trading at between 0.3 and 0.4cts. I am also interested to see if SGX will approve the warrant adjustments as frankly, I don't recall this happening in our exchange in such a dramatic way. Guess, if it is approved, there will be many others folllowing this example.........
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Post by oldman on Sept 25, 2014 7:22:16 GMT 7
As expected, they just announced the 100 to 1 consolidation. Series of events: First a 12 for 1 rights with 1 for 1 bonus and now a 100 to 1 consolidation. 28.528 bil shares will be consolidated to 285.28 mil shares. End result is actually like a 4 for 1 consolidation. They also announced a perpetual bond of up to $300 mil as well as a performance share plan for their staff. I think this is getting far too complicated for me and I will not be following anymore. Some articles worth noting: business.asiaone.com/news/odds-stacked-against-minority-shareholderswebb-site.com/articles/xpress.asp
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moats
New Member
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Post by moats on Sept 25, 2014 8:31:04 GMT 7
Oldman
In the IT industry, the Consultants used to say, "If you can't convince them, CONfuse them".
I wonder why SGX allow such issuances of rights/warrants to surface that even a seasoned investor like you says its "too complicated".
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Post by oldman on Sept 25, 2014 8:55:31 GMT 7
Moats, I don't blame SGX. There is nothing wrong with their tools. Just that some use too many tools one after the other. I rather management focus on building companies rather than use financial tools to excite the market. For me, I don't usually follow stocks unless I think that there can be money making opportunities. When I don't see these opportunities anymore, I usually don't like to spend anymore time on these stocks. Oldman
In the IT industry, the Consultants used to say, "If you can't convince them, CONfuse them".
I wonder why SGX allow such issuances of rights/warrants to surface that even a seasoned investor like you says its "too complicated".
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Post by zuolun on Sept 25, 2014 10:19:38 GMT 7
Moats, I don't blame SGX. There is nothing wrong with their tools. Just that some use too many tools one after the other. I rather management focus on building companies rather than use financial tools to excite the market. For me, I don't usually follow stocks unless I think that there can be money making opportunities. When I don't see these opportunities anymore, I usually don't like to spend anymore time on these stocks. oldman, Years ago, my businessman friend alerted me not to touch Liang Huat's shares when the company issued the 2nd batch of new shares and later 1-for-10 Share Consolidation. He claimed that Liang Huat's boss ever approached him and others to help find jobs for his workers who were idling around his factory for more than a year. Birds of the feather flock together. Singapore eDevelopment is one of the SGX-listed "walking dead" companies, return from the dead. No matter how the new shares are structured; the ulterior motive is to make full use of its existing public-listed company status to make good profit by selling worthless shares to the public, legally.
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Post by oldman on Sept 27, 2014 6:05:22 GMT 7
Interestingly, they managed to get the warrants adjusted. I am sure many others will follow this example..... infopub.sgx.com/FileOpen/SeD-AnnWarrantsAdjustment.26.09.14.ashx?App=Announcement&FileID=316214Another good example of the power of supply and demand is the price of these W161230 warrants. According to the SGX website, these warrants have an exercise price of 1ct when the mother share is currently trading between 0.1 and 0.2cts. The warrants however are trading between 0.3 and 0.4cts with 9.5 mil to buy and 8 mil to sell. Yes, there was an earlier announcement suggesting that these warrants may be adjusted both in terms of number of warrants and exercise price but so far no further announcement has been made even though the rights issue had been completed a few weeks ago. Saying all that, as these warrants are likely to be tightly held, one should not sell these without having the physical stock.... ie, one should not short these warrants.
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Post by pain on Sept 28, 2014 22:21:33 GMT 7
Hi Oldman / Zuolun & rest,
Just looking at the warrants (Existing) & Piggyback really confused me. Consolidation of shares & 'Walking Dead' too.
In your opinion, what do you think his main objective is? To raise OPM or to raise 'investors' interests? I saw a full page advert from this company saying that they has changed name and into internet business.
Not vested. Thanks.
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Post by oldman on Sept 29, 2014 4:35:29 GMT 7
Looks like it was all in the plan to get investor attention. In case you are wondering whether the warrants are worth considering, here are my thoughts: 1 mil current warrants is roughly equal to 6 mil new warrants with exercise price of 0.2cts. 1 mil current warrants at 0.3cts will cost $3,000. After the mother share consolidation of 100 to 1, these may be also consolidated to 60,000 warrants with an exercise price of 20cts. Shares should then be trading around 15cts after the 100 for 1 consolidation. If warrant price is then 5cts, the 60,000 warrants will be worth $3,000..... the same as buying the current warrants at 0.3cts. Yes, my calculations may be wrong as I don't know the formula for the consolidation of the warrants. I am just assuming that the number of warrants will be consolidated 100 to 1 as well and as well as that, the warrant price will be consolidated from 0.2cts to 20cts. As always, I stand corrected as I am not following this stock anymore and will not spend any more time looking at their previous announcements. Hi Oldman / Zuolun & rest, Just looking at the warrants (Existing) & Piggyback really confused me. Consolidation of shares & 'Walking Dead' too. In your opinion, what do you think his main objective is? To raise OPM or to raise 'investors' interests? I saw a full page advert from this company saying that they has changed name and into internet business. Not vested. Thanks.
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Post by zuolun on Sept 29, 2014 8:50:46 GMT 7
Gambling with Other People’s MoneyImagine a superb poker player who asks you for a loan to finance his nightly poker playing. For every $100 he gambles, he’s willing to put up $3 of his own money. He wants you to lend him the rest. You will not get a stake in his winning. Instead, he’ll give you a fixed rate of interest on your $97 loan. The poker player likes this situation for two reasons. First, it minimizes his downside risk. He can only lose $3. Second, borrowing has a great effect on his investment — it gets leveraged. If his $100 bet ends up yielding $103, he has made a lot more than 3 percent — in fact, he has doubled his money. His $3 investment is now worth $6. But why would you, the lender, play this game? It’s a pretty risky game for you. Suppose your friend starts out with a stake of $10,000 for the night, putting up $300 himself and borrowing $9,700 from you. If he loses anything more than 3 percent on the night, he can’t make good on your loan. Not to worry — your friend is an extremely skilled and prudent poker player who knows when to hold ,em and when to fold ,em. He may lose a hand or two because poker is a game of chance, but by the end of the night, he’s always ahead. He always makes good on his debts to you. He has never had a losing evening. As a creditor of the poker player, this is all you care about. As long as he can make good on his debt, you’re fine. You care only about one thing — that he stays solvent so that he can repay his loan and you get your money back. But the gambler cares about two things. Sure, he too wants to stay solvent. Insolvency wipes out his investment, which is always unpleasant — it’s bad for his reputation and hurts his chances of being able to use leverage in the future. But the gambler doesn’t just care about avoiding the downside. He also cares about the upside. As the lender, you don’t share in the upside; no matter how much money the gambler makes on his bets, you just get your promised amount of interest. If there is a chance to win a lot of money, the gambler is willing to a take a big risk. After all, his downside is small. He only has $3 at stake. To gain a really large pot of money, the gambler will take a chance on an inside straight. As the lender of the bulk of his funds, you wouldn't want the gambler to take that chance. You know that when the leverage ratio — the ratio of borrowed funds to personal assets — is 32–1 ($9700 divided by $300), the gambler will take a lot more risk than you’d like. So you keep an eye on the gambler to make sure that he continues to be successful in his play. But suppose the gambler becomes increasingly reckless. He begins to draw to an inside straight from time to time and pursue other high-risk strategies that require making very large bets that threaten his ability to make good on his promises to you. After all, it’s worth it to him. He’s not playing with very much of his own money. He is playing mostly with your money. How will you respond? You might stop lending altogether, concerned that you will lose both your interest and your principal. Or you might look for ways to protect yourself. You might demand a higher rate of interest. You might ask the player to put up his own assets as collateral in case he is wiped out. You might impose a covenant that legally restricts the gambler’s behavior, barring him from drawing to an inside straight, for example. Looks like it was all in the plan to get investor attention. In case you are wondering whether the warrants are worth considering, here are my thoughts: 1 mil current warrants is roughly equal to 6 mil new warrants with exercise price of 0.2cts. 1 mil current warrants at 0.3cts will cost $3,000. After the mother share consolidation of 100 to 1, these may be also consolidated to 60,000 warrants with an exercise price of 20cts. Shares should then be trading around 15cts after the 100 for 1 consolidation. If warrant price is then 5cts, the 60,000 warrants will be worth $3,000..... the same as buying the current warrants at 0.3cts. Yes, my calculations may be wrong as I don't know the formula for the consolidation of the warrants. I am just assuming that the number of warrants will be consolidated 100 to 1 as well and as well as that, the warrant price will be consolidated from 0.2cts to 20cts. As always, I stand corrected as I am not following this stock anymore and will not spend any more time looking at their previous announcements. Hi Oldman / Zuolun & rest, Just looking at the warrants (Existing) & Piggyback really confused me. Consolidation of shares & 'Walking Dead' too. In your opinion, what do you think his main objective is? To raise OPM or to raise 'investors' interests? I saw a full page advert from this company saying that they has changed name and into internet business. Not vested. Thanks.
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