What if HBOS Goes Ahead with a Right Issue?

ianmr65

purch wrote: »

errr............it doesn't answer that on Incademy

soz... was busy on house price threads

ianmr65

cheerfulcat wrote: »

Hi, ianmr65,

Are you thinking of a stock split, perhaps? Different animal altogether...

So stock splits can be used to raise capital, intresting concept!!

debbie42

ianmr65 wrote: »

erm i never mentioned script/bonus/capitalisation or stock splits issues,

ianmr65 wrote: »

Companies on the up often do rights issues, not just to raise capital, but to help make the share price more manageable than 30000p per share or whatever. Dell, and ebay did this.

Making the share price more manageable is normally effected by a stock split. That's what cheerfulcat was commenting on. I'm curious as to when Ebay and Dell had rights issues as you suggested?

ianmr65

debbie42 wrote: »

Making the share price more manageable is normally effected by a stock split. That's what cheerfulcat was commenting on. I'm curious as to when Ebay and Dell had rights issues as you suggested?

they both had a series of share splits - 7 in dells case, and if i recall correctly, a rights issue each, shortly after their IPOs in the late 80s for dell, and late 90's for e-bay. Rights issues normally also have the effect of diluting value, at least in the short term, therefore making the share price more manageable, though their primary function is to raise capital.
I'm sure treasury departments, and investor relations officers take both factors into acount, with different weightings, when deciding what they would like their share range to be, in an ideal world, when considering a rights issue.

In any case HBOS is not considering a share split, and as previously stated, debating the correctness of financial definitions is all very well, but will not really help the OP. Who was asking for a simple explanation.

Tho they are great for demonstating everyones financial accumen, so lets all give ourselves a big pat on the back for being accurate, if unintelligible.

napoleon

Tozer wrote: »

Rights issues generally don't have a huge affect per se on the share price. It is the rationale for the rights issue. I think HBOS are doing the prudent thing.

I suspect the share price will actually rise before the issue as the market takes on the shares before they come ex rights.

I'll be taking my full allocation, thats for sure.

No!!!! This is the silliest thing I've read in a very long time.

ianmr65

napoleon wrote: »

No!!!! This is the silliest thing I've read in a very long time.

Yes indeed...

with - Hbos - barge - wouldn't - pole - touch

mix up and re-assemble, in the correct order.

Tozer

napoleon wrote: »

No!!!! This is the silliest thing I've read in a very long time.

Just because you don't agree, doesn't make it silly. I actually think your thread is particularly pathetic as it lacks any argument whatsoever. Bottom line is most brokers seem to be recommending.

I'm taking my rights up in full. You don't have to and it is for everyone to determine on the basis of their own research.

ianmr65

Tozer wrote: »

!!!!. Just because you don't agree, doesn't make it silly.

I'm taking my rights up in full. You don't have to and it is for everyone to determine on the basis of their own research.

I admire you pluck... still you are perfectly correct, it's your money, no one elses. I guess napoleon was worried in case anyone else followed your lead.

Tozer

ianmr65 wrote: »

Yes indeed...

with - Hbos - barge - wouldn't - pole - touch

mix up and re-assemble, in the correct order.

Cosmic. Can I have yours?

Tozer

ianmr65 wrote: »

I admire you pluck... still you are perfectly correct, it's your money, no one elses.

Not looking for admiration thanks. Just think people should do some substantive research before charging out their opinions.

The rights issue is going to do little for the share price in the long run - particularly considering that the banking sector is heavily undervalued at the moment - for obvious reasons.