RBS Rights Issue

IGK

royeee wrote: »

What/how did you calculate?

In the previous example, with the current share price at 276.5, that's 76.5p above the £2.00 rights price.
You get to buy 11 £2.00 shares for every 18 of your current holding, so the value of that is 76.5*(11/18) = 46.75. 276.5 + 46.75 = 323.25.

Put another way, assume you had 180 shares originally, and you take up your rights and buy 110 more at 200. You now have 290 shares valued at 276.5
To go back to the old price:
You have 290 * 276.5 = £801.81
Minus 110 * 200.0 = £220.00
Leaves 180 * 3.225 = £581.85

anna42hmr

got my papers today, looks like i dont have to pay out as much as i thought for the rights issues, as i have a couple of types (ones from sharesave and 1 from profit share) and one of them, i dont have to pay any money to take up the options, as they sell a certain amount of the rights to fund my purchase of some of the others at no cost to me, the other batch i have to pay for though

eildon

Help needed on this please.

See the share price has fallen even more, is it worth taking up the rights? Have some spare cash so could buy some, but not all of them. Just not clear whether they are a good home for more of my money or not

ad44downey

Definitely not. Shares down another 6% today. IMHO You're just throwing good money after bad.

The housing market is just about to tank.

poppy10_2

ad44downey wrote: »

Definitely not. Shares down another 6% today. IMHO You're just throwing good money after bad.

The housing market is just about to tank.

Most people agree with you: :money:

RBS Falls on Speculation Rights Offer Won't Be Fully Taken Up

Royal Bank of Scotland Group, the U.K.'s second-biggest bank, fell in London trading on speculation its £12 billion rights offer won't be fully subscribed.

RBS fell 4.7 percent to 242 pence. The bank last traded as low in March 2000.

``There's a concern about the size of the rump that might be left over after investors have taken up their rights,'' said Richard Hunter, head of U.K. equities at Hargreaves Lansdown Stockbrokers in London.

``There is concern the rights issue will not get taken up and that the underwriters will be left with stock they will then have to sell at a discount''

eildon

thanks for this.

Was in the Bank speaking to their Financial Advisor (tied) who thought I should apply for rights straight away, but to say I am getting cold feet is an understatement.

Might be as well to just sell the rights and keep the dividend and any monies I get back.

bit worrying reading quote from Poppy10

liz111_2

I have no idea what I'm doing. My dad used to tell me what to do, but he died in Feb, and I'm totally confused! Is the share price likely to fall below £2 after the new shares have been bought? If it doesn't, wouldn't it be a good idea to 1) by the new shares and then 2) sell them fairly quickly afterwards even if you don't really want to be investing more money in RBS?

debbie42

liz111 wrote: »

I have no idea what I'm doing. My dad used to tell me what to do, but he died in Feb, and I'm totally confused! Is the share price likely to fall below £2 after the new shares have been bought? If it doesn't, wouldn't it be a good idea to 1) by the new shares and then 2) sell them fairly quickly afterwards even if you don't really want to be investing more money in RBS?

I'm unsure as to what to do myself, too. Any thoughts as to the share price movement is speculation. I guess the bottom line is, do you think RBS is a good investment, long term or short term? I did when I bought the shares, but can maybe think of better places for my money now!

I have several options I'm currently considering:
Exercise all my options.
Exercise part, to keep my holding at its current level.
Don't exercise any, let the rights lapse and see if I get any recompense from the registrar.
Sell my existing rights (hardly worth it, IMO!)
Bale out of RBS altogether.

My options are further muddied by the fact that I have two holdings of RBS shares: one in an ISA and one outside. I'm going to think about it over the weekend and make my mind up for tuesday.

gazza975526570

My view - and its only my view, is that longer term it will turn into a sound investment to take up the rights.

Only time will tell though

anna42hmr

i personally have taken up my option, i sent the cheque or yesterday, firstly as some of my shares are from a profit sharing scheme any way, i dont ahve to pay for some for that batch, as the trustees sell a certain amount to fund me having the remaining signed over to me, so the batch i have i dont have to pay out as much as i thought i would have to pay out any way

and secondly, i too believe in the long term it will sort it self out, and if not at the end of the day i do not invest more than i can afford to loose (no i am not worth a fortune or anything like that, but if the worse was to happen and the shares completely crashed it would not ruin me financially)

and thirdly i have received my dividend cheque this morning, and have used some of that to fund the options purchase

it must be a fairly popular decision, as over 95% of shareholders voted for the rights issue