Forum Archive Index - September 2001

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

>
> 
> You must be thinking of your AIRVBs
>
>
If I was, I would never admit to it of course ;-(
> 
> 
> What I actually intended doing was to "sell" the rights at the
> weighted average of the last day of trading, treat the proceeds as a
> dividend and reinvest them in the head shares at the weighted
> average price on the same day
> 
> I intend to do the same thing with TWRCA when the second instalment
> is due at the end of this month.
> 
> Does this sound ok?
> 
> 
Well, you are the competition organizer, so you get to set the rules!

I guess whatever way it is handled you are going to get some sort of 
distortion, so I guess what is "fair" depends on what the objective 
of the contest is.  My suggested method of selling off a 
proportion of the other shares to buy the share which is having the 
cash issue will lead to the resulting portfolio being 
relatively 'overweight' in the share that has the cash issue.

Your suggestion is probably neater, but might result in the 
share being underweight in any portfolio compared to what would 
happen in reality.  Personally I like to regards rights issues as a 
buying opportunity rather than look at selling them cheaply when both 
the head share and rights price are depressed (which usually happens 
at the time of a rights issue).

The whole subject is an interesting discussion topic in its own 
right. SNOOPY





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