Resource exploration successes aside, WHSP was the catalyst for me buying into RUM.
A strong, successful company holding a major shareholding. I believe they would have a high cost of shares as I purchased a number of parcels around the time that WHSP made some of their purchases.
I assume they, like most of us have massive negative percentages blazing in red against our/their holdings.
This offer is a sensational opportunity to average down our cost base but I sense a feeling that some/many SH are at the end of the line with the continual decline in our investment and very wary about throwing more money into a bottomless hole.
WHSP obviously see value in this company or they wouldn't be underwriting and committing to their full entitlement and money and time is not a consideration for them.
Here's the catch 22. If we don't take up our entitlement WHSP will sweep up everything left over for .02c a 54% discount on the SP before the offer. We will be gifting them below value shares.
They could hypertheticaly increase their share holding to upwards of 50% at which time we effectively become a subsiduary of WHSP as they would be able to take control of the board and run the show their way. Not necessarily a bad thing, but if they take control I fear the liquidity in the SP maybe subdued and stay in the .02 range.
Then there is a Left Field possibility of an extended SP of .02c or lower which would make a perfect platform for a total takeover offer at say .04c a 100% premium , a SP less than the current pre rights offer and massively undervalued to the potential of the RUM resources.
Just a few ideas playing on my mind in this decision making process.
Really torn on whether to take up the offer or not.
RUM Price at posting:
2.0¢ Sentiment: None Disclosure: Held
