Stock rights have always been a damned-if-you-do, damned-if-you-don't thing for me.
Consider this: you have shares of NI. Your cost is say 10 pesos. NI comes out with a stock rights offering that for every 5 shares you have, you can avail of 1 at 1 peso. You have 2 choices. If you buy the rights, your cost will adjust accordingly as will the share price. However, you can't sell everything until the rights have been given to you. Who knows when that will be and what has happened to the share price by then?
If you don't buy the rights, your cost remains the same and you don't shell out extra money. The price of the shares will still adjust accordingly giving you immediate losses. So what do you do?
If you want to preserve the integrity of your acquisition cost, sell everything before ex-rights date and just buy back later on after the shares have already adjusted.
So that brings me now to the question I've been wondering ever since this stock rights thing came out. What's so great about a stock rights offering at 1 peso when you know all stock rights scenarios are like what I just mentioned?
aviator wrote:for Tarantrader! pag nag exdate na at naka bayad ka na sa stock rights na sinubscribe mo pwede mo ng i unload yung old shares mo? para masave mo yung old position mo sa dilution? yung can still get the rights? kelan ba nila ibibigay yun? parang stock dividends na may payment date 1 month after the ex date?
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