Wagon Share Discussion Threads

[aleman] 12/6/2008 13:49

I thought they were cheap at 120p then at 40p. I think they are cheap now. But if WR gets the majority of the shares he has more leverage to squeeze small shareholders again with some other wheeze. I would not normally play with anything like this and am just monitoring for when the deal is done.

[hybrid07] 12/6/2008 13:40

Hatto, it's not that hard for the market cap to increase 10 times since it is only 7 mil right now.

But it doesn't have to increase 10 times. For a start the rights issue is underwritten so we know we are going to get another 49 mil i.e. it is effectively 58 mil at the moment.

If it will go much above 58 mil then it is a great idea to buy shares now, because they are effectively "geared up"

Aleman, presumably the 4p issue price is conservative, i.e. designed to be below what Ross and the Banks that are refinancing the company believe that the company is worth. Therefore 4.17p should be cheap.

Therefore your comments suggest this is a good buy at 6p, right?

I guess the market is saying that the company isn't worth much, and 4p is close to the mark.

But I suspect that this is too small for institutions to bother with, and PIs and journalists don't understand it

I can see that the whole thing looks risky, but it is likely to look a lot less risky after the rights issue

[aleman] 12/6/2008 11:07

The maths is not complicated. Each share bought now is like an option to buy 11 at 4p with the first share paid up. The shares will therefore magnify by 11 any premium the market thinks the shares will ultimately trade at. If the market thinks the shares will ultimately trade at 2p over the 4p option price, all that premium goes on today's share which would cost 4p + (11 x 2p) = 26p. Currently , the shares are about 5.76p which would represent a total cost of 44p for 11 shares + a premium of 1.76p/11 = 0.17p each. This suggests shares will trade at 4.17p after exercising. This seems fairly cheap. If current shares went up to 26p to indicate and eventual 6p price, they would not actually be very expensive but I'm sure small PIs would then sell, consolidating large shareholders grip on the company. I think it is a very good way to of squeezing out small shareholders and grabbing a company on the cheap for yourself if you have lots of money. I'm sure this type of exercise will be repeated elsewhere.

[killieboy] 12/6/2008 10:53

Am I missing something here? Surely Ross will take this one out once he owns most of the shares ie by the end of July?

[mikey34] 12/6/2008 09:56

Hatto,
some good thoughts....agreed.

[hatto] 12/6/2008 09:29

Good morning everyone.

Been following this share since some one brought it to my attention on the PET thread.

I think the Rights Issue is truly extraordinary.

Its good for existing shareholders in that providing they can afford to pay for their issue then it is an excellent method of averaging down their price paid.

Some must have bought at much higher levels & this will lower their average.

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On the other side if one cannot afford to take up the issue you'll never get your investment back.

The Market Cap would have to increase by around 10 times to see this near impossible feat.

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Going forward, (if things go well), one could see a lot of profit taking on the 4p folks have paid for their additional shares.

6p for example is 50% up on the price paid & will be irresistible for some.

But perhaps the main question to be answered is will WAGN be worth its new Market Cap of around £50M.

Not sure on that one in today's VERY DIFFICULT market conditions.

I will remain an interested bystander.

[mikey34] 12/6/2008 08:43

Hybrid,

Join the club.I would really appreciate some detailed views on how this might pan out.The proportions of the RI make an unusual scenario.

[lyndaandsteve] 10/6/2008 13:46

Bottom line from those that have read and digested the accounts, if you strip out all the liabilities can anyone post what the NAV is?

I would assume that its pretty reasonable, so why not go for a fire sale as I have no sentimental interest in saving European jobs when the board are out to steal the company.

[topdoc] 09/6/2008 22:13

Does it remind you of AHT and RGU of old

[topvest] 09/6/2008 20:40

I bought into Wagon again first thing. I've taken the view that a 4p input price is very good value. You only need to buy a small volume and can think about how many rights you want to take up later. There is also some opportunity to sell the nil paid shares in the market as well. This market is offering some great opportunities, if you take a long term view.

Wagon have been caught out badly imho, through the inability to raise funds without an equity issue and a lack of interest from investors to stump up any cash unless the price is very low. Fundamentally, the business is ok and should continue to do ok. Their problem is too much debt and that will be improved following the rights issue.

[napoleon 14th] 09/6/2008 20:36

If you have personal tifs about not being politically super-correct,
taking them to the moderator is indeed the right thing to do.

I hope it doesn't pollute the thread, which is about WAGN....

[robizm] 09/6/2008 13:59

I am holding onto to these. I have too many to take up the rights < but will sell some and use the proceeds to buy more at 4p. I feel for the long termers as I only bought Friday but it is too late to sell now and long term this has a lot more going for it than against it.

[napoleon 14th] 09/6/2008 13:05

topdoc - IMHO the instis; whom I guess might have quite a few from much higher prices in '06.
To them 40p worth of rights is only, say, 20% if what they paid per share.
You can bet they'll protect their interests & not pass them up.

That's over 50% of the company's capital, & adding PIs ensures that.
Ross is looking for a good deal, but the instis would be fools (& get sacked)
if they invited him to write all the rules himself.

PIs should stick with the instis,
making any potential bidder pay a normal price,
not the one I'd try to minimise were I in Ross's shoes!

[topdoc] 09/6/2008 12:47

What about the other institutions. Are they going to stand on the sidelines while he does that?

[ihavenoclue] 09/6/2008 12:24

bench2 - 9 Jun'08 - 09:43 - 972 of 973


This is one of the most dilutive rights issues in stock exchange history and consigns Wagon into the penny stock category for some time. 115m shares o/s becomes 1265m shares so a market cap of £12.65m prior to the issue (@11p) becomes £50.6m at 4p.The only winners appear to be Mr Ross ,the banks , and the preference share holders . The existing shareholders are shafted. What bets on the rights take up 20% , 50% ? Sad because there is a decent company with precision engineering skills and £700m of turnover being treated like dirt. My guess is no divi for two years a 1 for 10 consolidation in 2009 to get back to 30-40p and a cheap 50p take out by Wilbur in 2010!

=========================================

You think he will wait till 2010 ? LMAO ... he should get a large percent of the company then force it to accept his low offer for the rest.

[dead-cat bouncer] 09/6/2008 11:01

Until you know who actually owns the main block of shares it would appear incredibly high risk to buy into this to get the rights. If Ross becomes the majority owner, the opportunity to shaft the shareholders once again would be ripe. If he only ended up with less than 50%, it might be worth a punt. My big worry is that the scale of the right issue is a very good indication of the contempt in which existing shareholders are held. Thank goodness I never got involved with this!

[bench2] 09/6/2008 09:43

This is one of the most dilutive rights issues in stock exchange history and consigns Wagon into the penny stock category for some time. 115m shares o/s becomes 1265m shares so a market cap of £12.65m prior to the issue (@11p) becomes £50.6m at 4p.The only winners appear to be Mr Ross ,the banks , and the preference share holders . The existing shareholders are shafted. What bets on the rights take up 20% , 50% ? Sad because there is a decent company with precision engineering skills and £700m of turnover being treated like dirt. My guess is no divi for two years a 1 for 10 consolidation in 2009 to get back to 30-40p and a cheap 50p take out by Wilbur in 2010!

[robizm] 09/6/2008 09:15

Nice to be blue today and hopefully more to come.

[napoleon 14th] 08/6/2008 10:11

10 new shares for every one held.

So buy 100 before 260608 & get 1000 in the rights issue at 4p each.

That's if you think it's worth it!


IMHO they wanted to pull a 1 for 1 @ 40p some time back, LOL, but left it too late!

[cyberpost] 07/6/2008 20:18

peter

you would be able to buy 1,000 new shares at 4p.

Multiply your existing holding by 10 and that's the amount you will be entitled to subscribed for.

[peterdonovan] 07/6/2008 20:14

is this right if you hold 100 shares you can buy 10 new shares at 4p