Well I would imagine by now most holders would have been tapping away on their calculators and come up with 85c (84.7c) as the break even back to the 2nd June close to get their holdings value to the same.
This demerger is actually extremely complexed and to be honest yesterday is not really the right time to see how the demerger has gone. LLL is not yet trading for starters.
Complexed also in the fact that FFX has retained a 20% stake. Now I think
@fooca pointed this out early on that FFX is not a shareholder of FFX, so for it to retain a stake it was in essence given shares (paid a nominal fee) that belonged to FFX share holders.
Now obviously for that to benefit FFX holders this stake needs to be reflected in FFX Market cap / Share price.
Add to this when LLL lists it will have already raised $100m through an entitlement. If you did not partake you have also been diluted. Of course it could be less than 70c, but more on that in a moment.
So yesterday FFX market cap dropped $714m reflecting no LLL in specie.
LLL raised a further $100m so that gives $814m
LLL shares on issue will be 1.197b less FFX holding this is 958m, so it’s no coincidence that’s 85c per share to get the required MC.
So if we expect LLL to list at IPO price FFX 239.5m shares will be worth about $167.6 m or 14c per share, or 40% of the MC.
Now we all need LLL to list at 85c, 70c won’t cut it. But at 85c FFX holding will be worth $203.5m or 17.2c, nearly 50% of yesterdays close.
I’m not going to estimate where we open with LLL until maybe closer to the time, the key thing is that FFX is looking super cheap if you honestly think LLL will open at 70c
Also if it opens at 85c the entitlements will be looking good with a paper 21% profit.
The above is reflective of the share structure outlined in the prospectus on the basis of $100m being raised which it was.
It would certainly would have been far cleaner for FFX to have demerged the whole asset and not retained any of LLL as unless the LLL holding is truly reflected in FFX SP the FFX holders pre merger are not getting the benefit.
I think Tuesday could see a last swathe of selling and then the bargain hunters will sweep in. IMO
GLTAH
