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The 1.4:1 distribution was highlighted in the prospectus and...

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mattroberts9

172 Posts.

22

03/06/22

12:44

Post #: 61802668
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Originally posted by LambSauce: ↑

Alright fellas, I’ve had a chance to cool off since my ranting and I apologise for freaking out earlier. But I do have some thoughts I’d like to share (more ranting, but less emotional lol), and someone please correct me if I’m wrong or saying anything dumb.

Firstly, I’m aware it’s my responsibility to make my own financial decisions, and any misunderstanding is my own fault. That being said, I’m a little disappointed that nobody made it abundantly clear that the numbers we were expecting to see from this demerger would most likely result in our portfolios taking a fairly big hit. We were expecting about 35c for FFX and about 70c for LLL. That supposedly leaves us with the MC of FFX yesterday containing both companies. But somehow nobody considered the fact that we have to cop a ~30% loss from LLL after only receiving 1 share for every 1.4 FFX. If you hold 1 share of company ‘ABC’ at $1 and it demerges into ‘ABC1’ (lets say 30c) and ‘ABC2’ (70c), you would then NEED 1 share of each company to break even. This isn’t happening with FFX because like I said, we lose ~30% from the 1.4:1 ratio. Was everyone already aware of this? Because I was under the impression that holding FFX was a golden opportunity to snatch up some LLL shares for cheap. Maybe I was under the wrong impression? I know we now have the gift of hindsight, but the numbers we were expecting would have made it absolutely obvious that selling yesterday would be the better option.

I get the whole “well LLL might open higher than 70c” or “FFX might climb back up” but the point is, we need LLL to open at about $1 to even match where we were yesterday and I don’t recall ever seeing anybody mention this. It would have been FAR better to just leave yesterday with the FFX profits and buy into LLL on the 16th, because even buying at $1 would leave you much better off.

Again, this is my own fault. I just don’t get the whole “You signed up for this” and “Don’t trust people online”. Was literally everyone expecting this? Am I the only one out of the loop here? Or is this just a situation where FFX has dropped much lower than expected and we were actually hoping for something like 50-60c today?

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The 1.4:1 distribution was highlighted in the prospectus and demerger presentation brutha, it was never a secret.

FFX Price at posting: 35.0¢ Sentiment: Hold Disclosure: Held
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