RBS Rights Issue

purch

If you don't take up the rights or sell them yourself then the company will normally do that for you and return the money it gets for them to you

Surely you mean

'If you don't take up the rights or sell them yourself, the the rights will lapse'

If you don't exercise your 'rights' you lose them, and the value of the shares you currently hold is likely to fall due to the higher number of shares in issue, for a company which may or may not be worth more as a result of the rights issue.

royeee

purch wrote: »

Surely you mean

'If you don't take up the rights or sell them yourself, the the rights will lapse'

If you don't exercise your 'rights' you lose them, and the value of the shares you currently hold is likely to fall due to the higher number of shares in issue, for a company which may or may not be worth more as a result of the rights issue.

If the investor's share of the rights-issue or any part is not taken up they are nil-paid rights in which RBS will sell them and send a cheque at rate less than the £2 per share rights issue price. So in this case you don't entirely lose them.

Cozworth806

The indicative price of the rights is about £1 each so I believe that by selling 2 rights will allow you to buy one new RBS share. However with the drop in price (announced at 375p now 345p) the rights price will also drop. (About 90p at current prices)

If you don't have the money then you can either sell the rights in total or as above enough to cover to buy some. Up to you which you want to do... either way unless the underlying price of the shares rises you will not make a profit just by taking up the rights. The RBS price will drop when the shares become ex-rights as there are more in issue.

purch

If the investor's share of the rights-issue or any part is not taken up they are nil-paid rights in which RBS will sell them and send a cheque at rate less than the £2 per share rights issue price. So in this case you don't entirely lose them

Yes that is right

My Bad.............(All Guns Blazing No Ammo)

I was off on another track

The_doomed

whats the latest on this guys?

earlgrey_3

The_doomed wrote: »

whats the latest on this guys?

RBS now trading ex-rights so closed at 276p with rights at 76.5p. That puts the current value per share + rights at about 323p by my calculation.

I'm likely to be taking mine but will be an interesting year for the bank sector. My untutored way of looking at it is that all the banks will be looking to rebuild their profits and that's a very different situation to when a single company in a sector gets into trouble. They're more or less all in the same basket.

Possibly slightly different too to sectors such as retailing where non-food retailers can't do anything to force customers through the doors to buy their goodies. To some extent banks always control the agenda in a way other businesses can't. It's they who decide the margins on lending even if they won't be making those past profits on mortgages again for a while. Or maybe just wishful thinking.

anna42hmr

earlgrey wrote: »

I would never borrow to take up a rights issue.

i agree, unless you are doing what i am doing, ( borrowing from the bank of mum and dad )until some money i am due in october arrives when i will then pay them back

i am intending to purchase the ones i have rights to buy, received papers in the post for it today, payment is needed by 9th june)

royeee

earlgrey wrote: »

RBS now trading ex-rights so closed at 276p with rights at 76.5p. That puts the current value per share + rights at about 323p by my calculation.

What/how did you calculate?

napoleon

Don't give them any more money, you're only giving them your own hard-earned money to shore up their own mistakes!

royeee

Is it possible to sell the allocated nil-paid shares to buy the discounted shares during the ex-rights window? In that way you pocket a few more shares for nothing apart from the fee.