QUOTE(Brico @ Apr 30 2015, 03:17 PM)
Just noted this after acquiring AAX. IS THIS THE REASON FOR THE SHARE TO TUMBLE THIS MORNING? Need help from any Sifu here? Does it mean i have to buy up my entitlement to keep my holding relevant?
13 May 2015
Entitlement Description Renounceable rights issue of up to 1,779,071,540 new ordinary shares of
RM0.15 each in AirAsia X Berhad ("AAX Shares") ("Rights Shares") together with
up to 889,535,770 free detachable warrants ("Warrants"), on the basis of 3
Rights Shares for every 4 AAX Shares held as at 5.00 p.m. on 15 May 2015
("Entitlement Date") and 1 Warrant for every 2 Rights Shares subscribed for by
the entitled shareholders at an issue price of RM0.22 per Rights Share (the
"Rights Issue with Warrants")
Right issues do have diff meaning and interpretations :-
1) A co may secure some big projects and need money to carry out these projects ..which is positive
2) A co after an IPO....most money lost in doing the businesses..and now needs shareholders to bail them out with more cash calls...
Generally 2 is deemed to be bad.......and tends to dilute yr earning power with no feasible
profits in sight ..worst with tonnes of free warrants to attract people ( misleading )
Just my thinking.........only
Ya u need to buy the rights...else diluted more ....and u ended with more losses ( diluted ) ..U can opt to sell the rights in most cases...for a few sen maybe..but u lost the free warrants ( given to new owner u sold yr rights to )
This post has been edited by SKY 1809: Apr 30 2015, 03:44 PM