Forum Archive Index - May 2001

["Jeff Smith" <jc.smith@waikato.ac.nz>]

Hi all

re SUB announcement of rights issue, Michael Phillips wrote:
*******************************************************
As I understand it, NCM rules are going
to require the rights to be issued at an average of the last 20 days
trading.  This will move the issue price from 30c per share closer
toward 40c per share.
*******************************************************

I don't understand what effect this will have on the market price. With the
extra shares taken up under a rights issue, won't that dilute the total
issue and the market should react accordingly with a lower market price?

Also what advantage would there be for a holder to buy extra shares through
the rights issue when they are available on the market for roughly the same
price ?

I'm confused about this one and hope someone could please answer my
questions!?

Regards
Jeff

disc. Holds SUB






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