The share price now is $1.31 with 2+1 bonus shares mean effectively each Caely share worth $1.965. But of course people will take profit before the share hits $1.965 mark. Conservatively the share should worth at least $1.65 if we take an average.
By combine the new warrants with full exercise price assume to be RM0.50 and NTA of 0.92 for current 80mil shares should able to get the estimated price of the share price after the announcement. Too bad is not bonus issue of share but warrant.
rough calculate if all warrant exercise and total no of shares is 120mil then price should adjust to RM0.80. Wow! All lot going to be trap at the top for long time.
good news. assuming now you buy 2 caely shares at 1.30 each. they will offer you a warrant at 0.5 which means you spend 3.1 for 3 caely shares. hence on average your cost per share is only 1.03 so you will still make good profit even at 1.30.
Free warrant is not free but need to pay the exercise price to get the share. I prefer bonus issue rather than right issue. In fact, I was expecting right issue because the price escalate and usually is an indication of some fund rising announcement coming.
The warrants are priced out of the money, but with ample time before expiration to provide for the possibility that good company performance will raise the underlying share price above the exercise price, making the warrants worth exercising.
An example is MRCB right issue announcement share price is above RM1.20 and market is saying the RI price at RM0.80 and immediately share price adjust close to the RI price. I believe a lot of peoples are trapped at RM1.10~1.30. What happen if price adjust close to RM0.50 that is the worst situation.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
bullbullbully
384 posts
Posted by bullbullbully > 2018-01-16 21:31 | Report Abuse
Sell sell sell...run for ur life...