Australia's largest stock trading and investment forum Australia's #1 stock forum

SGH

Click for more information

0.00%

54.5¢ slater & gordon limited

Ann: PSD Acquisition and Entitlement Offer - Presentation, page-111

First 111 Last

Share
Profile

Follow
TheNaturalOrder

61 Posts.

19/04/15

11:15

Post #: 15113730
Share

Originally posted by TheNaturalOrder ↑

3) Suppose the SP is higher than the offer price at the time of the bookbuild, but the bookbuild price ends up being much less than the SP. Then you get screwed because you don't get much capital return, and it's expensive to purchase shares on the market. You obviously don't want this scenario to play out. It's most likely to happen if there's a lack of interest from retail investors resulting in a huge number of shares to sell off at the bookbuild (and/or institutional investors don't want much at the bookbuild). Institutional investors, on the other hand, might benefit quite nicely from this scenario. Suppose they were able to scare off flighty retail investors by pusing a few extra shares into the market when the deadline is approaching, thereby pusing the SP lower. They could then buy back into the retail bookbuild at an even lower price again! This is a scenario all retail investors should be quite wary of.

Expand

It's also worth noting that big entitlements offers can be targeted by hedge funds who short sell the stock in an attempt to drive a bookbuild shortfall. The following link mentions this occuring to Primary Health's entitlements offers offer a few years back: ASIC's crackdown on share manipulation

SGH Price at posting: $6.87 Sentiment: Hold Disclosure: Held
Upvote

0 Great analysis

Reply

Top Stories

NVU

Nanoveu surges 10% after benchmark testing for new AI chip begins

IRX

InhaleRX snags $38.5M in funding from VC biotech funder Clendon

What's causing the cost-of-living crisis, and how to navigate it

MKT

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

TLG

Talga Group wins key permit for flagship graphite mine in Sweden

MTH

Mithril's drilling in Mexico picks up silver at 997g/t, gold at 28g/t

Week 42 Wrap: HotCopper's top picks; new ASX 200 record; world yawns at war

SNX

Sierra Nevada raises $2M for silver exploration at Blackhawk

M4M

Macro, Norden set up transport solutions initiative for West Pilbara

SWP

Swoop lobs $18M offer at microcap telecom Vonex – in which it holds 19.9%

There are more pages in this discussion • 1 more message in this thread...

First 111 Last

Add SGH (ASX) to my watchlist