Community

Share knowledge. Find answers. Ask questions.

Online Share Trading

Engage and learn about markets and trading online

Rights Offer - Simple Explanation

Reply
Limitless
Contributor

Rights Offer - Simple Explanation

Hi People Can someone offer a SIMPLE explanation of the rights offer. (What should a long term investor do?) Tx
0 Kudos
5 REPLIES
Super Contributor

Re:Rights Offer - Simple Explanation

Right issue is usually given to shareholder who has existing shareholding in the company. Example Mr A own 500 share and company declare a right issue that 2 for 1 issues. SO Mr A will recive 250 additional shares.
0 Kudos
Highlighted
royzen2
Contributor

Re:Rights Offer - Simple Explanation

And how will this impact the share price after these rights have been exercised? What's the catch?
0 Kudos
Regular Contributor

Re:Rights Offer - Simple Explanation

the price has settled at about R2.55 so if you take up the rights @ R1.90 - that's 35% you gain - so if you think PAN is a good investment you take up the rights, conversely if you think PAN is not such a good investment you can sell your rights and make 25%.
0 Kudos
Super Contributor

Re:Rights Offer - Simple Explanation

I think PAN went ex rights yesterday.
0 Kudos
Super Contributor

Re:Rights Offer - Simple Explanation

If you are a long term investor you have answered your own question.
0 Kudos