Forum Archive Index - November 2000

["Peter Riches" <peter@peaktechnology.co.nz>]

Thanks Derek

Can you explain for me the maths for working out that the FFS price should
in theory drop to 28 or 29 cents? Is this something to do with head share
dilution coupled with time until expiry of the rights? (Thanks for your
patience and please excuse my ignorance.)
=======================================
Peter Riches

> Hi Peter,
>
> In theory the share price should drop from 35 c to 28 or 29c and the
rights
> would trade at 3 to 4 cents (28c + 2 * 3.5 = 35c).  Therefore in theory it
> is not possible to make money this way.  However as the Air NZ rights
issue
> illustrates the Market is useless at maths and therefore this may indeed
be
> a good way to earn a quick buck (At least the risk appears minimal).
>
> Derek
>
>
>
>
>
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