KNM 7164 Rights issue - case study

View previous topic View next topic Go down

KNM 7164 Rights issue - case study

Post by Cals on Mon 22 Oct 2012, 12:44

RENOUNCEABLE TWO-CALL RIGHTS ISSUE OF 488,920,659 NEW KNM SHARES AT AN ISSUE PRICE OF RM1.00 FOR EACH RIGHTS SHARE ON THE BASIS OF ONE (1) RIGHTS SHARE FOR EVERY TWO (2) EXISTING KNM SHARES HELD AT 5.00 P.M. ON 18 OCTOBER 2012 TOGETHER WITH 488,920,659 DETACHABLE WARRANTS ON THE BASIS OF ONE (1) WARRANT FOR EVERY ONE (1) RIGHTS SHARE SUBSCRIBED FOR, OF WHICH THE FIRST CALL OF RM0.40 IS PAYABLE IN CASH ON APPLICATION AND THE SECOND CALL OF RM0.60 IS TO BE CAPITALISED FROM KNM'S SHARE PREMIUM ACCOUNT

[You must be registered and logged in to see this link.]

case study in progress

_________________
“It cannot be said too often that in speculation and investment, success comes only to those who work for it”
avatar
Cals
Administrator
Administrator

Posts : 25277 Credits : 57721 Reputation : 1766
Male Join date : 2011-09-08
Location : global
Comments : “My plan of trading was sound enough and won oftener that it lost. If I had stuck to it I’️d have been right perhaps as often as seven out of ten times.”
Stock Exposure : Technical Analysis / Fundamental Analysis / Mental Analysis

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by mataseri on Tue 23 Oct 2012, 14:26

so,

1. effectively if you own 2 shares now, you will get 1 additional share.

2. a warrant to buy share at 1RM, of which the company will pay 60sen and you pay 40sen

mataseri
Junior Member
Junior Member

Posts : 343 Credits : 363 Reputation : 18
Male Join date : 2012-01-12
Location : Jalan Ipoh, KL

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by Cals on Tue 23 Oct 2012, 22:24

indeed +1

1)however we do not know how much is the new warrant term sheet

2)and secondly need to view this fundamentally as whether this dilution of shares would be good and the sale of the other company it has

_________________
“It cannot be said too often that in speculation and investment, success comes only to those who work for it”
avatar
Cals
Administrator
Administrator

Posts : 25277 Credits : 57721 Reputation : 1766
Male Join date : 2011-09-08
Location : global
Comments : “My plan of trading was sound enough and won oftener that it lost. If I had stuck to it I’️d have been right perhaps as often as seven out of ten times.”
Stock Exposure : Technical Analysis / Fundamental Analysis / Mental Analysis

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by mataseri on Wed 24 Oct 2012, 00:47

where do the company insider stand?

do we know? RHB is doing this.

mataseri
Junior Member
Junior Member

Posts : 343 Credits : 363 Reputation : 18
Male Join date : 2012-01-12
Location : Jalan Ipoh, KL

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by Cals on Wed 24 Oct 2012, 01:19

mataseri wrote:where do the company insider stand?

do we know? RHB is doing this.

point to ponder Hmm...

_________________
“It cannot be said too often that in speculation and investment, success comes only to those who work for it”
avatar
Cals
Administrator
Administrator

Posts : 25277 Credits : 57721 Reputation : 1766
Male Join date : 2011-09-08
Location : global
Comments : “My plan of trading was sound enough and won oftener that it lost. If I had stuck to it I’️d have been right perhaps as often as seven out of ten times.”
Stock Exposure : Technical Analysis / Fundamental Analysis / Mental Analysis

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by Cals on Thu 25 Oct 2012, 22:25

KNM 7164 current rights issue

date of announcement 4th OCT

Entitlement ex date 16th

start of OR trading 19th

close of OR trading 25th

[You must be registered and logged in to see this link.]

_________________
“It cannot be said too often that in speculation and investment, success comes only to those who work for it”
avatar
Cals
Administrator
Administrator

Posts : 25277 Credits : 57721 Reputation : 1766
Male Join date : 2011-09-08
Location : global
Comments : “My plan of trading was sound enough and won oftener that it lost. If I had stuck to it I’️d have been right perhaps as often as seven out of ten times.”
Stock Exposure : Technical Analysis / Fundamental Analysis / Mental Analysis

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by Cals on Thu 25 Oct 2012, 22:47

recently we took this as a case study of the OR,

alot of people didnt understand the meaning of this OR which the mother share holder need only pay 40% for getting the mother share conversion done.

Many did convert it the way as of paying 40% and i get a warrant sweetener about 15 sen (winghaur credit for his calculation)

lets get down into details in these two scenarios

scenario 1 -average investor holds KNM at avg eg: 0.72 sen 100lot (10,000unit)

1)normal market perception

100 lot X 0.72 = 7200RM

> 50 lot OR X 0.40 = 2022.15 RM plus fees (normal market assumption for this special OR which the company pays 60%, holder pay 40%)

total costing 150 lot = 9222.15 new cost avg price 0.61

this is not true, for the real calculation based on the term sheet release

b)
50 lot X 1.00RM = 5000RM

so total is

150 lot (5000+7200) = 12,200RM / 15000 = avg 0.813

what will happen to the investor with the current price levels on the mom share? will he gain a good deal or just tried to raise his avg price on his holding?

2) Gung ho retail speculator

buys KNM-OR 0.16 for eg: 100000 units = 16,000RM

a) expects to pay assumingly 100000 X 0.40 = 40,000RM

total value expected for 100k units is 56,000RM, this might be as the same expectation from your retail investor where in actual fact

b) 100000 unit X RM1 = 100,000 + 16000 = 116000 RM for 100,000 shares
works out to be avg price 1.16 RM

true value reveals on avg pricing

so many may argue i did pay 40% only for it , however we look at paper value 1.16 & you paid lets say in this example 56k for a stock that is worth 1.16 however the mom stock is 53.5 RM

if you sold now you would be losing a huge sum of your % avg price
what happens if the mom is 45 sen and you cut it ? 71k gone

is it worth the risk? i dont think so, many in the market think it is. not worth the trouble and thinking

just a thought and credit to mabs Devil


_________________
“It cannot be said too often that in speculation and investment, success comes only to those who work for it”
avatar
Cals
Administrator
Administrator

Posts : 25277 Credits : 57721 Reputation : 1766
Male Join date : 2011-09-08
Location : global
Comments : “My plan of trading was sound enough and won oftener that it lost. If I had stuck to it I’️d have been right perhaps as often as seven out of ten times.”
Stock Exposure : Technical Analysis / Fundamental Analysis / Mental Analysis

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by phoenix777 on Thu 25 Oct 2012, 23:23

+1 for cals
i trade it like normal stock Giggle

_________________
‎"Great people make us feel we can become great." - Mark Twain. Choose your company. Who you hang out with shapes you.[You must be registered and logged in to see this image.]

[You must be registered and logged in to see this link.]
avatar
phoenix777
Moderator
Moderator

Posts : 13701 Credits : 16143 Reputation : 1704
Male Join date : 2011-02-03
Location : Malaysia
Job/Hobbies : eating good food
Stock Exposure : 1 year
Stock Portfolio : empty handed

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by mabs on Thu 25 Oct 2012, 23:25

woi u gotta rep me oso. i asked cals to do this case study n im the one explained until saliva dried + sore throat just not.

give la rep. Tongue
avatar
mabs
Member
Member

Posts : 922 Credits : 1154 Reputation : 143
Female Join date : 2011-11-17

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by Cals on Thu 25 Oct 2012, 23:26

okla rep to you Devil

_________________
“It cannot be said too often that in speculation and investment, success comes only to those who work for it”
avatar
Cals
Administrator
Administrator

Posts : 25277 Credits : 57721 Reputation : 1766
Male Join date : 2011-09-08
Location : global
Comments : “My plan of trading was sound enough and won oftener that it lost. If I had stuck to it I’️d have been right perhaps as often as seven out of ten times.”
Stock Exposure : Technical Analysis / Fundamental Analysis / Mental Analysis

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by mabs on Thu 25 Oct 2012, 23:30

[You must be registered and logged in to see this link.]
avatar
mabs
Member
Member

Posts : 922 Credits : 1154 Reputation : 143
Female Join date : 2011-11-17

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by mabs on Thu 25 Oct 2012, 23:32

[You must be registered and logged in to see this link.]
avatar
mabs
Member
Member

Posts : 922 Credits : 1154 Reputation : 143
Female Join date : 2011-11-17

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by Bursa berserker on Thu 25 Oct 2012, 23:50

got expired date?

_________________
Be fearful when others are greedy and greedy only when others are fearful.
Warren Buffett.

Have a heart of greed and vanity, will lead us to strive for searching opportunity and let us reach our goal,success.
avatar
Bursa berserker
Senior Member
Senior Member

Posts : 2794 Credits : 3168 Reputation : 171
Male Join date : 2011-10-07
Location : universal
Stock Portfolio : mitra :D lol

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by phoenix777 on Fri 26 Oct 2012, 10:29

mabs wrote:woi u gotta rep me oso. i asked cals to do this case study n im the one explained until saliva dried + sore throat just not.

give la rep. Tongue

Beer Beer nah some beer for u Giggle
2 reps to u Dancing Dancing

_________________
‎"Great people make us feel we can become great." - Mark Twain. Choose your company. Who you hang out with shapes you.[You must be registered and logged in to see this image.]

[You must be registered and logged in to see this link.]
avatar
phoenix777
Moderator
Moderator

Posts : 13701 Credits : 16143 Reputation : 1704
Male Join date : 2011-02-03
Location : Malaysia
Job/Hobbies : eating good food
Stock Exposure : 1 year
Stock Portfolio : empty handed

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by phoenix777 on Fri 26 Oct 2012, 10:31

speculators gain more hor....i gt some frens bought at 15 n exercise....they say if they lose money means all of the investor lose money too Giggle

_________________
‎"Great people make us feel we can become great." - Mark Twain. Choose your company. Who you hang out with shapes you.[You must be registered and logged in to see this image.]

[You must be registered and logged in to see this link.]
avatar
phoenix777
Moderator
Moderator

Posts : 13701 Credits : 16143 Reputation : 1704
Male Join date : 2011-02-03
Location : Malaysia
Job/Hobbies : eating good food
Stock Exposure : 1 year
Stock Portfolio : empty handed

Back to top Go down

Re: KNM 7164 Rights issue - case study

Post by Sponsored content


Sponsored content


Back to top Go down

View previous topic View next topic Back to top

- Similar topics

 
Permissions in this forum:
You cannot reply to topics in this forum