Forum Archive Index - April 2000

["Richard Hooper" <hoop@ihug.co.nz>]

I don't know if I have this correct , are the rights issue going to create
more shares on issue?
If I read it correctly the number of shares will increase from 567.5 m to
709.4m creating a
dilution effect .
With a proposed 1 for 3 ,this would mean 1/4 drop in shareprice wouldn,t it
?
This doesn,t look very promising financial wise for us investors holding
airva/b
if the rights issue is struck at $1.50.

Using an example of airvb shares
say we buy   30000 @ $2.65   =  $79500
buy up rights10000 @ $1.50   =  $15000
total shares  40000  costing     =  $94500

After rights issued shareprice goes from $2.65  to $2.00 (1/4 less .dilution
factor)
total shares  40000 @ $2.00  =  $80000
Net loss  $14500
To break even shareprice needs to be $2.37 after rights issue ($2.97 at this
time)

Now I am confused as to why institutions are willing to buy shares on behalf
of Bry
when they stand to make only 3cents a share(1%) at most .That is if the deal
is struck
at $3.00 a share
  Comments please.   As how I see at everyone seems to want to make a
loss.It seems that
the shareholder is going to suffer the greatest loss ,short term (as usual!)
Where have I gone wrong in my calculations.

I have AIRVB shares (don't know for how much longer)
----- Original Message -----
From: graham corrigan <gdcorrigan@yahoo.co.nz>
To: <sharechat@sharechat.co.nz>
Sent: Saturday, April 08, 2000 9:30 AM
Subject: [sharechat] AIRVB warning


> Good spotting Simon. I have been tracking AIRVB (on
> the DFM site which offers excellent individual
> transaction amounts) and you are absolutely correct.
> There has been massive institutional buying of AIRVB
> obviously for a possible major on-sell to BRY.
> I got the message and bailed out but at 2.70.
>
> Regards,
> Graham Corrigan
>
>
>
> --------------------------------------------------------------------------
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> http://www.sharechat.co.nz/          New Zealand's home for market
investors
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