bradford and bingley

thistleboon

received a letter today.
Do I go for the rights issue or not?
Help

poppy10_2

Long discussion here:
http://forums.moneysavingexpert.com/showthread.html?t=914855

Short answer:
No.

shepherding

New to the forum, but also received the B & B letter.

Presume it's no good throwing good money after bad! Or is that rather cynical?

Cozworth806

I only have 50 shares left but they will be getting my £36 to take up my rights.

It may be nuts but then shares can go up as well as down. Barclays have risen by about 33% in the last 3 days, B&B were 35p about 10 days ago. (c.50% rise)

I'll_Be_Frank

You've got a few weeks to decide. See what's going on then.

Frank.

earlgrey_3

Just a question of if you want to invest more money in that company. The shares closed today at 51.5p. If you really want more shares then buy them in the market: no point paying 55p for something you can currently get for 51.5p (or 35p a few days ago).

bristolleedsfan

earlgrey wrote: »

Just a question of if you want to invest more money in that company. The shares closed today at 51.5p. If you really want more shares then buy them in the market: no point paying 55p for something you can currently get for 51.5p (or 35p a few days ago).

Id have thought what people need to be deciding is whether to take either of these options :

"Cashless take up" or "Sell all of your rights". :think:

Masomnia

Wait and see. Did I read somewhere that you have until 18th August to decide?

Nearer that time the share price may be a lot higher than 55p, and it could prove to be a good deal.

earlgrey_3

Masomnia wrote: »

Wait and see. Did I read somewhere that you have until 18th August to decide?

Nearer that time the share price may be a lot higher than 55p, and it could prove to be a good deal.

If the shares do go substantially higher than 55p then the value of your rights will also rise proportionately which you could sell or allow to lapse and have sold for you.

You still need to decide whether it's likely to be a good investment over period you hold the stock. If you think it is, you still should aim to acquire the extra shares at the lowest cost whether that's by taking up the rights or buying in the market. Only take up all the rights if you want more shares and the rights issue is the cheapest way to get them.

Cozworth806

earlgrey wrote: »

Just a question of if you want to invest more money in that company. The shares closed today at 51.5p. If you really want more shares then buy them in the market: no point paying 55p for something you can currently get for 51.5p (or 35p a few days ago).

You need to factor in dealing costs and stamp duty if you do that, which wouldn't be payable under the rights issue.

If you are investing c. £180 then even at £10 with £9 for stamp duty then it raises the actual effective price to 57.5p.

earlgrey_3

Cozworth806 wrote: »

You need to factor in dealing costs and stamp duty if you do that, which wouldn't be payable under the rights issue.

If you are investing c. £180 then even at £10 with £9 for stamp duty then it raises the actual effective price to 57.5p.

Plus the market-makers turn, but if it's 35p, 51.5p, 55p or 57.5p you still have to decide if you want to increase the investment. Doubling an investment just to save broker fees doesn't sound the way to make the decision.

Whether £180 worth of shares is worth holding or losing sleep over anyway is something else. Unless they've enough shares to have a balanced portfolio of reasonable sized holdings most people would be better with the money in some sort of collective investment - or in the bank earning intertest.