Attempting to decrease the amount of spam regarding MGTRD shares.....
So you've logged into your trading app and discovered some MGTRD shares eh...
"What is MGTRD? Am I in trouble? are the trading police going to come and kick down my door?"
SLOW DOWN
Before going any further, please read the Rights Issue prospectus. You can find this on the MGT Announcements Page.
If you still have questions, keep reading....
A “right” is not a “share”, it is a privilege granted by the company allowing you to buy a share at a discounted price.
Think of a right as when someone says “mah free speech rights”, it doesn’t mean you own a share, it simply gives you the “right” to buy discounted share.In this case, MGT have given 1 right for every 4 MGT shares you have (won’t go into the additional 5c option/2 new rights for now as this will add more complexity – Keeping it simple!!)So, lets run the following scenario….
Say you have 400,000 MGT shares.
Because of the rights issue, MGT will give you 100,000 MGTRD rights. So now you have: 400,000 MGT shares and 100,000 MGTRD rights
You have a few options here:
1) do nothing – the MGTRD rights will expire, on the nominated expiry date (as per prospectus). On the expiry date, you will still have your 400,000 MGT shares, but you will not gain anything extra…
2) sell your MGTRD rights – if the current price of MGTRD is 0.003, and you sell your 100,000 MGTRD you will get $300 (minus fees etc)… Upon expiry date you will have 400,000 MGT shares PLUS anything you have gained from selling your rights...
3) take up the rights offer – convert your 100,000 MGTRD rights to 100,000 MGT shares on the expiry date (as per prospectus). To do this, you will have to pay 1c x 100,000, or, $1000. Read the prospectus on how to do this… Upon expiry you will have 500,000 MGT shares
4) Trade to buy/sell MGTRD – say if you buy another 50,000 MGTRD at 0.003, you will have 150,000 rights. On the expiry date, you will pay:100,000 x 0.01 = $1000 (value of the rights given to you from MGT 1 for 4 offer)PLUS(50,000 x 0.003) + (50,000 x 0.01) = $650TOTAL to pay for the $150000 shares on expiry of rights = $1650
The decision is yours do DYOR!!!!
Remember, a right is not a share – understand this and you’re halfway there!
Full disclosure, I am a noob at this... feel free to correct any errors in my explanation or add further explanation to the thread...
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