Barclays Rights Issue

sabretoothtigger

This banker dude reckons Lloyds is a better deal then Barclays.
Im inclined to agree with him though I think Barc is a buy above 260

http://www.youtube.com/watch?v=Q8lpt6r3hcU
http://www.breakingviews.com/lloyds%E2%80%99-shares-look-a-better-bet-than-barclays%E2%80%99/21107766.article

Barclays will endeavour to find investors to pick up the shares.

The rights are options basically.

If you sell rights at the start you are expecting the Barc share to fall over the term before it releases the new shares to trade.
Or you could even buy rights and add to your ability to buy at 185, this presumes Barc underlying share price rises.

Either is possible, generally investors should take up rights. Its not as negative or special as it seems, if a bank takes out a bond issue they are fund raising in a similar way and profits from that cost of loan will be to the bond holders.
In a rights issue the share holder benefit from financing their own company and of course you presume the money will be well used, dont just write it all off as a cost with no upside.
No the dividend does not have to go down, it does rely on business success. Some companies invest amazingly well like Vodafone did in USA with its partner

bigadaj

Sabre, isn't that assuming that share holder returns will be positive though?

In my opinion they might be good for a short term punt, depending on price, but the destruction of shareholder value in the majority of UK banks over the last decade or more has been shocking.

atush

I took them up, but only had a small holding. I had cash sitting idle in the acct.

May sell them. May sell them all lol. Don't care overmuch either way-small fish.

Richchad

I too had a very small amount, sold both the rights and shares early today, waiting for the dosh now, will add it to a cash ISA for probably a not much better return I guess..:(
I know maybe should have waited for better price long term but had them for years, missed the boat, got them for nothing anyway, glad not to think about them anymore.. lol

atush

Cash ISA? Have you learned nothing?

Thrugelmir

bigadaj wrote: »

In my opinion they might be good for a short term punt, depending on price, but the destruction of shareholder value in the majority of UK banks over the last decade or more has been shocking.

My immediate concern will be the impact of the investigation by the SFO along with the number of potential scandals (of old) that Barclays may yet face fines for.

BarleyGB

Now that the rights issue has completed, I have two types of Barclays Shares in my trading account:

Barclay Ord @ 272p up 0.99% today

Barclays (New) Ord 245p down 9.43% today

What is the difference between these two shares? why would the new shares have lost nearly 10% today and the others gone up slightly?