Cineworld share value what happened?

JackRS

Thanks for all your views:


Unfortunately we missed the deadline to sell the rights, didn't receive te letter until 8 Feb, deadline to sell rights was 9 Feb, such a complex set of documents spotted the purchase deadline for 19 Feb but missed that, not that we had time to sort it.

Our decision now is do we just leave it and wait for whatever they give us letting rights lapse. Can't afford to purchase the full entitlement or do we buy as many as we can at the reduced rate 157p?


What I don't understand is what will we get back for each share if we let the rights lapse? I think it would be share price less 157p so if share price is todays that would be 1843*(238p-157p)= £1492
Theoretically if we buy £1000 worth and the value stays at current value 238p then there is a potential of around £500 profit less fees etc. Clearly nobody knows where that value will go it might be 138p as soon as the process is complete?
If we let them lapse those 637 shares may get back 637*(238-157)= £515. Obviously some big assumptions there but trying work out is better to invest in some more or let it lapse as it seems what could be made in the short term is similar if the price goes up. Or is it possible that in a few months they could be worth more and a greater profit made.

Linton

If you let the rights lapse they will be sold on. The amount you get back from a successful Rights Issue is effectively the difference between the 157p offer price and the price when your rights lapse so in the short term it doesnt matter financially whether you buy or not. The downside of not taking up the offer is that you are reducing your holdings in what could be a very lucrative investment.

The 238p price is the reduced one as they do not include the Rights - the shares were valued in the 500's before the Rights Issue. The market takes account of future expected prices.