trading ex rights tomorrow, page-3

This is my understanding of the AVX price ex right:

Current market cap
a) Total share on issue = 247M + 9M options + 8M shire share = 264M shares

b) Total shares x closing price = market cap gives you 264M x 94.5cents = $250M. This is the market cap prior to rights issue

Right issues
c) Rights issue + placement = 114M + 29M = 143M shares

d) Rights issue + placement = $75M

e) New market cap / no. of new + existing shares = share price, in this case $325M / 407M = 80c

So tomorrow share price will be trading around 80cents.

Is my calculation correct? Will welcome any comments.

However the SP will be influenced by:

1) Lack of understanding of ex rights, seeing share price drop by 15% (94.5c to 80c) investors may panic and sell, assuming they don't read much into AVX and can't be bother ( for ultra small investors who hold $2-$5K stocks or busy/old ppl who doesn't care)

2) Selling begets more selling, so you might be able to pick up small parcel in the 70's cents.

3) Cumbersome of trading rights, not many ppl know how to do this.

Previous 40% uptake of rights clearly shows some of these factors in play.

Ask yourself, if you could buy the same shares tomorrow at around the same price (assuming similar equivalent diluted price) as today, why would you participate in the rights and encumbersome yourself?

You have to fill in the rights form, trying to figure out whether it's the ex-rights or record day to qualify, unsure how to trade rights, and can only trade the shares in late April 07.

Hence the sell down today. That's my thoughts

cheers