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Online Share Trading

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Lonmin rights

Reply
Moonabhai
New Contributor
The shares are trading at over 70 cents yet the rights is at 21.4 cents. This is a big gap.
10 REPLIES 10
indium
Contributor
Please can someone who owns Lonmin explain why you do not sell your shares now for 70c odd and buy the equivalent nil paid letters and realise a 50c profit per share. I am flummoxed and assume that there is something that I am missing and I was wondering if one of the bright sparks on the forum could explain to me why this has not happened as to me it seems logical and that such a large arbitrage opportunity would be taken. many thanks
SimonPB
Valued Contributor
v you are right, the trick is an absolute over hang of sellers on the NPLS .. nobody wants to follow their rights .. and large players can't do what you saying as they'd move the prices
SteveE
Occasional Contributor
So what happens to the price the day after the rights offer?
101bn
Contributor
Very good question???
101bn
Contributor
Very good question???
101bn
Contributor
Very good question???
Not applicable
well, if nobody exercises their rights, and LON doesn't raise the capital it needs - the share price will crash to 1c - but will most likely get suspended around 10c a share.
Sivuyilex
New Contributor
Hi there, we are still in the consolidation process. I will rather increase/buy or hold on to my position till the consolidation process has been completed. With PIC willing to underwrite most of the shares it gives some future prospects. I will suggest you hold them on Mid term basis and make your final decision in Jan 2015. I also hope the platinum price will gain with rand supporting it, if it does not take a different direction.
Preston
Super Contributor
P.I.C also a shareholder of PPC. PPC made a new low today. Trade the price and the economics of the share.
SimonPB
Valued Contributor
hmmm, is that a turn around ?