It depends though..
Here is some examples.
NTL has 817,722,586 shares on issue
MCAP is $12.3m so price is 1.5 cents
(1) If Person X, hypothetically with 1m shares at 1.5 cents, is the only person to take up their rights then:
X paid $15,000 for their initial 1m shares at 1.5 cents.
X pays $15,000 for a further 3m shares at .5 cents.
X paid $30,000 for 4m shares at .75 cents per share.
At which point NTL has 821,722,589 shares on issue.
If the market still values NTL at $12.3m then the price is still 1.5 cents.
(2) However, let's say everyone takes up their rights:
NTL now has 3,270,890,344 shares on issue.
If the market still values NTL at $12.3m then the price would be .4 per share.
However, NTL will have over $12m (probably closer to $14m) cash in the bank so the MCAP should adjust upwards in terms of enterprise value and the fact it can grow with the money.
(3) And if half the people take up their rights?
NTL now has 2,044,306,465 shares on issue
If the market still values NTL at $12.3m then the price would be .6 per share.
NTL will have over $6m (probably closer to $7m) cash in the bank so the MCAP should adjust upwards in terms of enterprise value and the fact it can grow with the money.
These options don't take into account Person X's ability to buy and sell rights or do nothing.
I think the real kicker is that if more people take up their rights then NTL is in a better position to raise its MCAP/share price because it will be positioned to produce, explore, buy into farm-in agreements, so on and so forth. This rights issue seems to give shareholders their last opportunity to get a bigger piece before it goes to the Chinese.
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