Lonmin Share Discussion Threads

[careful] 28/11/2015 17:12

Still into Glen although my losses are mounting.
Thinking is that they trade over 90 commodities, as well as producing the stuff.
Hence their massive $220bn turnover.

Theory was that they should make money trading even when prices are depressed but trading demands capital.
If commodities do turn, gains in Glen could be huge.
but like the others it looks risky.

We will only know how these stories develop in a couple if years or so, starting with LMI.

[typo56] 28/11/2015 17:08

elvis ".... Remember when LMIN headed up to about 0.075p on Thursday when everyone thought there was a short squeeze in SA due to sub-division shares being released one week later in SA ......"

Everyone? Thought that daft ramp was put down well before it had legs!

[typo56] 28/11/2015 17:02

"If the gap remains the same on 10dec you would theoretically buy 1.04 and sell next morning 1.19."


Except:

The company's deadline for acceptance and full payment is 11am on 10 Dec but your broker will probably ask for a couple of days earlier.

In theory you should be able to sell your fully paid up shares from open on 11 Dec but some brokers are notoriously slack about crediting the shares to your account (I remember having a fierce argument with Selftrade about this some years ago).

Just because the LMI shares are 1.19 today it doesn't mean they'll be 1.19 on 11th Dec. You can be sure those with sharper brokers will be keen to cash-in fast and the price will dive. I think the safer way to play it is to sell LMI short ahead of 11 Dec and close with the paid up rights, but there is risk of having the short called in before 11 Dec.

[elvisrocks] 28/11/2015 14:21

Both good stocks, so you have a 5/6 stock portfolio?
Why not HSBC or Whitbread, that's where I'm heading next

[graham2405] 28/11/2015 14:17

Elvis

Only others I hold are BARC and GSK.

[elvisrocks] 28/11/2015 14:16

abryer just saw this in your Post "If the gap remains the same on 10dec you would theoretically buy 1.04 and sell next morning 1.19"
--------------
I think the market has headed that one off with the dates it has given for the Prospectus plus much earlier latest dates for NPR's and the sequencing to get to FPR's.
--------------
Don't get caught out

[graham2405] 28/11/2015 14:02

"A modest adjustment to the supply/demand numbers will cause a dramatic bounce."

Hope so............ ;-)

In the last few days I've bought GLEN, RIO, more RDSB & yesterday started buying BLT.

Avoided AAL, although it is looking seriously cheap.

Still some cash left, but it'll all be gone soon.

[careful] 28/11/2015 13:56

elvis
this commodity rout and the falls of the shares has surprised me, and yet I remember Rio falling from £71 down to below £10 before their rights issue a few years ago.
I am holding a range of commodity shares bought over the last few months at what I thought were never to be repeated rock bottom prices. They have fallen even further.

The answer is that i do not know how low they will go.
I do know that production numbers and consumption numbers for all commodities are at near record levels, despite this recent rout.

A modest adjustment to the supply/demand numbers will cause a dramatic bounce.

[elvisrocks] 28/11/2015 13:54

abryer, that's the "trap" isn't it.
You can sell at these prices, some manage to buy at these prices, all auto trades, no big NT's for several days. Last one I saw was 40m at 0.10p. Shorters may have shorted LMI, long on LMIN and could keep them (I think) and let them roll over into the 11th. The idea that there could be 115% subscription to the RI but really only 100%
--------------------
I may be wrong on what I quote here, others will correct me I'm sure.
--------------------
Google 'Short Squeeze", that's what could happen although I do not know for certain. It apparently happened in SA on Thursday.

[chrisbr777] 28/11/2015 13:45

Will post the excerpt here:----- Question
What is the difference between a Rights Issue and an Open Offer?

Answer
Those clients who hold on ex date of a rights issue or open offer will be entitled to receive rights or entitlements respectively.

Rights allocated from a rights issue are tradable in the market, therefore the event is open to anyone to take part.

Entitlements from an Open offer are not tradable and therefore an open offer is only available to existing shareholders.

In a rights issue, you have 3 options for your rights. You can take up your entitlement, sell your entitlement or lapse your entitlement. If you allow your entitlement to a Rights Issue to lapse, the company may pay lapsed proceeds.

It is also possible to sell part of your entitlement in order to fund the take up of the remainder of your entitlement. This is called Tail Swallowing.

An Open Offer gives only 2 options: Take up your entitlement or Lapse your entitlement. If you allow your entitlement in an Open Offer to lapse you will not usually receive any lapsed proceeds.

[abryer] 28/11/2015 13:43

I still don't understand the gap between lmin + 1p and Lmi. Would be interested to hear anyone who have actually managed to buy rights at 0.04p. If the gap remains the same on 10dec you would theoretically buy 1.04 and sell next morning 1.19.

[chrisbr777] 28/11/2015 13:42

Maybe you should read it then.

[elvisrocks] 28/11/2015 13:41

No, not reading what Graham sends me, can renounce rights clearly, that's why brokers are trying to get you to sell them not buy them.

[elvisrocks] 28/11/2015 13:40

careful, I actually missed seeing AAL at 400p last night, other than Vale who I don't know much about, they are the last of the big miners to announce div situation or could even be a cash call.

Do you see them going into the 2s or even 3s?

[chrisbr777] 28/11/2015 13:36

OK so Elvis in at >=1.20p. Elvis, did you read Graham's link below on rights?

[graham2405] 28/11/2015 13:36

"PMSL Graham, after you were defeated on your maths, you then tried pari passu, you then tried to overrule the Prospectus, you now try to run the line on non-renounceable rights. Where will your lunacy and that of chrisbr777 ever end?"

The rights in this issue are 'renounceable', you can sell them.

If they were 'non-renounceable' then you would be correct, in that they could not be bought or sold. So you would have to be on the register on the 17th to get them (or more accurately just hold before the Ex-Rights date).

That's not the case here, from the prospectus:

-------------------------------------------
If you want to sell all of your Rights, you should complete and sign Form X on the Provisional Allotment Letter (if it is not already marked ‘‘Original Duly Renounced’R17;) and pass the entire letter to your stockbroker, bank manager or other appropriate financial adviser or to the transferee (provided they are
not in the United States or any of the Excluded Territories).
-------------------------------------------

Clearly remouncable rights in this case.

[elvisrocks] 28/11/2015 13:32

Frankly, I don't really care but I think it will stay at the 1.20p area (TERP / AERP) then the market has to re-rate Lonmin. This period is just a confetti Micky Mouse period when nonsense numbers are in circulation. There is only $80m left in old equity so if that goes, so what, the bigger the uplift from the 11th.
---------------------
BM: My focus right now is that there’s nominal value in this company. We have impaired and the company’s value today is $1.6bn. the market capitalisation is S100m. the value uplift is massive so I am focused on persuading my shareholders that it is the right thing for them in their interests to vote yes on 19 November.

[careful] 28/11/2015 13:28

I was refused the option to buy on Halifax and HSBC, but could sell.

Graham,
Have you personally purchased rights LMIN, or do you know anyone else that has?

[chrisbr777] 28/11/2015 13:28

I don't know if Elvis will click your link Graham and read what is written (from Barclays). If he does he might just understand. Or maybe not :)

[elvisrocks] 28/11/2015 13:24

PMSL Graham, after you were defeated on your maths, you then tried pari passu, you then tried to overrule the Prospectus, you now try to run the line on non-renounceable rights. Where will your lunacy and that of chrisbr777 ever end?
-------------
Still, you're giving me some entretainment, been like that with Graham for the last month.
-------------
Address for dunces hat Graham?

[graham2405] 28/11/2015 13:23

"Rights allocated from a rights issue are tradable in the market, therefore the event is open to anyone to take part."

hxxps://help.stockbrokers.barclays.co.uk/help/event-processing/difference-between

[careful] 28/11/2015 13:23

doublng up can be the right strategy sometimes.
high risk here, with platinum rices so low.

but doubling up on the assumption or hope that LMI will be bought out for (say) £500m would be a very profitable move.
Assets will be about $2bn (£1.3bn) with no debt.
Rationalisation of this industry is inevitable, probably already being planned.

I have seen more reckless gambles than that in the past, it could work.
Me, i will take up rights and hope.

[elvisrocks] 28/11/2015 13:22

.... Remember when LMIN headed up to about 0.075p on Thursday when everyone thought there was a short squeeze in SA due to sub-division shares being released one week later in SA ......