bkw long term, page-8

My posts yesterday got moderated. So I'll use some different language today.

All the people who participated in the SPP got slaughtered. The basic reasoning is this: you all fell for those newspaper articles talking about stag profits etc by participating in SPPs.

What you have failed to realise is that while you focus on the known details, others (like me) were buying put positions (e.g. CFDs and the like) on the day of the announcement while the lambs were busy buying up small allotments to be entitled to the SPP. With the knowledge there would be massive dilution to existing shareholders (who logically would start selling off their holdings to match the amount they would take up under the SPP), the price of BKW must fall. Its a simple maths exercise to estimate with a decent confidence interval what the share price would fall down to.

I have closed out my short position below the SPP issue price the day the new SPP shares became eligible for trading. Good night, and thanks for playing.