Yes the only thing you have missed is the depression of price on the pre rights issue holdings, thus capital loss. Despite this I too believe a great deal for AEP. This now places their cash balances at $1.08 per share and still some $3.60 worth of other assets (may reduce close to $1 if they exercise right to take up more convertible notes and I suspect they will). For IBA it reduces gearing in an environment which crucifies financial leverage. I expect that IBA's price will firm once the retail tranche of raising is complete ( they sell to fund purchase of stock at 55 cents, who would blame them!). More importantly what happens with AEP going forward. They have already stated that they see their IBA investment as a two to three year investment horizon, and with a share price at such discount to NTA ( and even greater discount to NTA minus cash) got to imagine that UBS will recommend divestiture of assets to narrow value gap. Time will tell but I think the raising was a win win for AEP and IBA.I'm in and see this as a sleeper with deep intrinsic value. DYOR
AEP Price at posting:
$1.48 Sentiment: ST Buy Disclosure: Held
