Air Partner Share Discussion Threads

[topvest] 09/1/2017 08:45

At least the Company has performed well enough to be able to do a stock split! I think its a good move as well.

[darryn1] 09/1/2017 08:38

I think the stock split is a good move by the company. The lower price will make the shares appear more affordable to private investors, there will be more available to buy and sell and it will reduce the actual financial spread which can put people off from investing in a company. The directors would not bother to do this if they did not think it would be a good move for the company.

[gj2] 07/1/2017 13:44

Trident / Dozey :
FWIW, that's my take completely. It is put forward as increasing liquidity, but in practice appears irrelevant to shares quoted at a normal amount e.g. £5 to £10. It is regular two way market activity that creates liquidity. I would agree that reinvesting dividends in e.g. Reckitt Benkiser (circa £70) under the cheap dividend reinvestment schemes offered by most brokers would result in quite a few purchases of only 1 or 2 shares etc - but this has minimal effect as these purchases are aggregated anyway.

I remember about 15 years ago when most of my shares were held in certificated form. Dart Group proposed a 2 for 1 shares split (believe it or not) to increase liquidity. This was put to a shareholder vote, which I voted against for the reasons listed in post 150 above. A week or so later, I got a letter from the company (CEO/Chairman, Phil Meeson ?) explaining (again) the company's stated reason for the split, reassuring me that there was nothing unusual about the split etc. talk of being talked down to & talk of a diversion of Management time !

GLA

Geoff

[dozey3] 07/1/2017 12:46

It's not important, but fwiw I agree with trident. Look at it this way. Suppose instead of splitting into four the shares were split into four-hundred. The board's logic would suggest the spread would be hugely reduced to our advantage. Of course it would be reduced very considerably, but the percentage creamed off by the broker would not change - why should it? It might well increase judging by most penny shares.

It is when a share price increases hugely over the years to £40 or £50, say, that splits may make sense, where scrip dividends for example cannot be allocated part shares and are therefore inefficient.

[trident5] 07/1/2017 11:30

Want to have a bash at the questions I asked M?

[masurenguy] 07/1/2017 11:21

"You're happy, they're happy because you're happy and the advisors have transferred some of your wealth to themselves and they're happy too."

What a load of complete cobblers. You are just obtuse as I previously pointed out over a year ago.

Masurenguy17 Oct '15 - 28: If you can't understand it then that is clearly your problem. It is also not my role or responsibility to try and elaborate this any further, especially since you obviously can't comprehend what is a very simple concept.

You just continue to validate the Abe Lincoln quote in my earlier post #142.

[trident5] 07/1/2017 10:28

It begs certain questions though M.

- Why don't all companies consolidate / split their shares back to 100/110p if that generates optimal liquidity?
- If 100/110p is not the optimal spread to generate optimal liquidity - what is the formula used to calculate it?
- when looking at a spread why is the investor looking at the absolute amount and not the relative (percentage) amount
- if my lat post was a misrepresentation what did you mean by "todays spread of 13.5p would be reduced to 2.7p on a pro rata basis"?

My take on splits and consolidations is this: the finance industry is rammed with advisors looking for work. There's no work when nothing is happening, so some approach Boards and suggest a share split/consolidation would do wonders for liquidity and tighten the spread (and their fees). The directors are busy wondering about planes, flights and airports and without much thought are convinced that if they take your share certificates and cut them into five smaller ones and hand them back to you you'll express childish delight at the magic. You're happy, they're happy because you're happy and the advisors have transferred some of your wealth to themselves and they're happy too. Everyone's a winner!

So, given that I view it as a pointless exercise - I view it as a weak sell signal, somewhat amplified because it shows the directors are focussing their time on the share price not the business, which is never a good sign.

That's all from me unless you can demonstrate an explanation as to why cutting a pie up into a different number of parts changes the pie's size.

[masurenguy] 07/1/2017 00:54

What utter nonsense. Do you always try to make ridiculous misrepresentations or interpretations of what other people views are instead of addressing what they have actually posted.

This is what I actually stated last October: "The spread is too large - they need to expand the number of shares in issue by a 4 to 1 conversion which would create better liquidity and also reprice the shares at circa 100p - 110p. A liquid share is very easy to price and can be bought or sold without any significant impact on the price. An illiquid share is more difficult to price and even a small buy or sell quantity can have a significant impact on the price. A liquid share is usually characterised by a narrow spread whereas an illiquid share usually has a wide spread - like AIR."

This is what the BoD stated yesterday: "The Board believes that this split will improve the liquidity of the market in the Company's shares, reduce the percentage spread between the bid and offer prices and increase the attractiveness of the Company's shares to potential investors."

Perhaps the comprehension of plain English is not your strong suite !

[trident5] 06/1/2017 19:54

You seem to be of the view that if you buy a stock with a spread of 50/55 and sell when the spread is 100/110 you'll do better than buying a spread of 500/550 and selling at 1000/1100.

Uh huh.

[masurenguy] 06/1/2017 19:16

Perfectly serious but then I don't need to engage in enigmatic or ambiguous comments to try and create confusion in order to circumvent what I've previously posted.

[trident5] 06/1/2017 19:00

"Well just for starters todays spread of 13.5p would be reduced to 2.7p on a pro rata basis!"

Are you even being serious?

"I do not think much of a man who is not wiser today than he was yesterday.” Abraham Lincoln

[dozey3] 06/1/2017 14:52

My feeling is that it is a matter of perception rather than fact. Market makers think percentage margin and so should we. I do not think they will necessarily reduce their percentage margin with the increased number of shares, unless there is a marked increase in activity. This might happen of course; lots of people like getting more shares for their money. OTOH there are stacks of penny shares at humongous mark-ups. The share split strikes me as deck-chair rearranging.

[masurenguy] 06/1/2017 09:41

Well just for starters todays spread of 13.5p would be reduced to 2.7p on a pro rata basis!

[robsy2] 06/1/2017 09:29

Morning All
If is deemed to help, then great, but I can't really see how a share costing 500p is that much less marketable than one costing 100p!
R2

[masurenguy] 06/1/2017 08:50

RLOL !

"The Board believes that this split will improve the liquidity of the market in the Company's shares, reduce the percentage spread between the bid and offer prices and increase the attractiveness of the Company's shares to potential investors."

Quite a clear rationale but obviously not lucid enough for those still unable to comprehend it !

“I do not think much of a man who is not wiser today than he was yesterday.” Abraham Lincoln

[trident5] 06/1/2017 08:11

They don't explain the rationale for it either Masurenguy, largely because there isn't one.

I stand by my previous comments.

[masurenguy] 06/1/2017 07:50

At last ! This improvement in stock liquidity is long overdue.

Air Partner PLC
RNS Number : 4679T
06 January 2017

Proposed 1 into 5 share split and notice of general meeting

Air Partner plc (the "Company") announces that the Company is today sending a circular (the "Circular") to shareholders that describes a proposed share split and contains a notice of general meeting at which a resolution will be proposed to approve a share split.

The Board of directors believes that the Company's share price has risen to a point where it is appropriate to recommend that each existing ordinary share of five pence be split into five new ordinary shares of one penny each. The Board believes that this split will improve the liquidity of the market in the Company's shares, reduce the percentage spread between the bid and offer prices and increase the attractiveness of the Company's shares to potential investors. A long term aim of the Board is to attract and retain a diverse shareholder base with an appropriate balance between retail and institutional investors for a public company listed on the premium segment of the London Stock Exchange.

LOL - haven't heard from Trident5 on this thread recently. Now is his chance to contact the Air BoD to inform them that they are wasting their time making such a pointless move !

Masurenguy 15 Oct '15 - 20: The spread is too large - they need to expand the number of shares in issue by a 4 to 1 conversion which would create better liquidity and also reprice the shares at circa 100p - 110p.

trident5 16 Oct '15 - 21: How does that create any more liquidity? There'll be 4x as many shares available at a quarter the current price = the same liquidity.

Masurenguy 16 Oct '15 - 23:26 - 22: A liquid share is very easy to price and can be bought or sold without any significant impact on the price. An illiquid share is more difficult to price and even a small buy or sell quantity can have a significant impact on the price. A liquid share is usually characterised by a narrow spread whereas an illiquid share usually has a wide spread - like AIR.

trident5 17 Oct '15 - 08:32 - 23: Still can't see how a share split can impact liquidity. Liquidity can impact the spreads but I think you're getting all this muddled.

Masurenguy 17 Oct '15 - 09:59 - 24: I have provided you with a simple explanation but you don't appear to be able to comprehend it.

trident5 3 Nov '15 - 32: I can't see how a share split here will help liquidity and reduce the spread. If I want to sell some tomorrow I'm not going to think about it in terms of how many shares I want to sell but how much cash I need to raise.

[pvb] 30/12/2016 13:49

Oh sorry - I misread the announcement date as 30th rather than 13th. :-(

[masurenguy] 30/12/2016 12:50

That was two and a half weeks ago and has already been commented upon here !

[pvb] 30/12/2016 11:50

Another acquisition. Clockwork Research Ltd.

[speedsgh] 16/12/2016 11:14

Liberum edges up price target from 650p to 665p with a BUY rating.



CAVEAT: Liberum are the company's house broker.

[wildshot] 16/12/2016 11:07

Thanks for the explanation trident5. I understand your point now :-)

[trident5] 15/12/2016 18:51

Wildshot - no.
It references earnings per share. So, if the acquisition is paid for in cash it will enhance (increase) earnings where the profits of the acquisition are greater than the interest that would have been generated by the cash (which these days is effectively zip).

If the acquisition is paid for by the acquirer issuing shares then yes - you would be right.

[wildshot] 15/12/2016 18:31

trident5 I thought that for it to be "earnings enhancing" the acquisition had be earning at a higher margin than the current business?