Lonmin Share Discussion Threads

[typo56] 30/11/2015 09:05

As you like theoretical so much..

Theoretically LMIN should be worth 1p less than LMI because anyone holding LMIN has the option to convert to LMI by paying 1p. Just because at the moment LMI appears to be 46xLMIN is purely a coincidence. Try looking at what happened in other rights issues, even LMI rights issues (for there have been more!).

As for the "correct" price...the market is giving you a 46:1 weighting in favour of 1.035p (LMIN +1) over 1.165p (LMI).

[graham2405] 30/11/2015 09:02

Look at it this way..........

This is about those staying in, not those who are getting out, OK.

Before ex-rights day punters were probably selling LMI to raise cash to buy pay 1p for rights (that was the smart time to sell), hence selling pressure on LMI.

Since ex-rights date they have perhaps started selling LMIN, to tail swallow and raise funds to pay 1p for rights.

This would release any selling pressure on LMI and dump it all on LMIN.

Regardless of this 'anomaly' given the overwhelming numbers of LMIN it is likely to win out and the price will be much closer to 1.040p than the TERP of 1.19p or the current price of 1.18p.

Simples, and all IMHO.

[elvisrocks] 30/11/2015 08:58

Typo, go for it if you see something.
Good Luck. I'm not a professional trader as you know.

[elvisrocks] 30/11/2015 08:57

Typo, agree on 7393 but LMI whole company only has a market cap of £7m. It's acting as a tracking anchor to LMIN nil paids (emphasis nil paids) on a 46:1 basis. The market has had 6 days to work this out now. Could change but isn't at moment, 1.20p is the base.

[typo56] 30/11/2015 08:55

Elvis, I said I could see no arb opportunity between the UK and SA listings and all that sub-division nonsense. The LMI to LMIN arb is totally different.

[elvisrocks] 30/11/2015 08:54

Not called it wrong rackers, Elvis could indeed be that genius.
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Graham, you're the one with the fat mouth and maths maestro, fill your boots now, it makes no difference at 46p, tail swallow or buy an equivalent chunk now.
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47*47 is...
TERP or AERP is ...
24.75% discount is....
Reason a Prospectus is there is ....

[typo56] 30/11/2015 08:52

It just happens that at the moment the market has chosen to value LMI at much the same level as the day before it went ex-rights. There's no reason why that can't change at any time, just as it changed in the run up to ex-rights. As Graham says, the market decides the valuation, it's not locked down to any so called TERP.

[elvisrocks] 30/11/2015 08:51

Typo, you're changing your mind, you said at the weekend there was no arb.

It should be LMI-1 = LMIN and that should be 0.19p according to TERP / AERP. LMI is not really moving away from 1.20p. To me it will eventually go back to 0.19p at the end.

[rackers1] 30/11/2015 08:49

when will the oaf finally admit he called this so very wrong ?
He argues 24/7 about fking TERP but the real issue is the ever plummeting share price

When will you admit you called this very wrong elvis ? Or do you not think you have called it wrong ? lol

[graham2405] 30/11/2015 08:49

"If not why not abandon the idea of paying 46p and fill your boots with your ideas?"

Pretty obvious really, I strongly suspect that after consolidation they will be trading @ well below 100p

So why would I buy now?

[elvisrocks] 30/11/2015 08:45

Graham an investor following his rights is in no worse/better off putting in 46p than tail swallowing. Go do some sums using TERP.

Remember an investor who held rights on the 19th gets to buy his new shares at 1p or discount of 24.75%, the market has now adjusted for that so everyone - holders on the 19th or new entrants - are in the same boat.

If not why not abandon the idea of paying 46p and fill your boots with your ideas?

[graham2405] 30/11/2015 08:44

TERP, what is it with you and TERP.

Theoretical............

That's all it is, the market decides the price.

[typo56] 30/11/2015 08:42

to me LMI and LMIN are still tracking each other on a 46:1 basis

Er, they should track on a LMI = LMIN +1 basis. That's where the arb lies.

Supposing LMI gets ramped up this week to 2p. Do you think LMIN will track close to 0.043p...or 1p?

[elvisrocks] 30/11/2015 08:41

Graham TERP and the LMI/LMIN shares exist in a 46:1 ratio, same nominal value.
That's a fact. Try again.

[graham2405] 30/11/2015 08:40

"How the algorithim machines work to achieve that I have no idea."

Now that is true, you have no idea.

[elvisrocks] 30/11/2015 08:40

Please do tell me why utter tosh, you failed on every maths test so far.
Read also Post 7379. I put it there for you especially.

[graham2405] 30/11/2015 08:39

"Which is the same as
Buying 47 LMIN Shares (which would equal 1 LMI share), 47 times over at 0.025p = 55.225p"

Now this is where you go car wreck territory.........

Buying 47 LMIN = 47 rights, not 1 LMI share!!!!!

47 * 0.025p = 1.175p

47 1p's to cover fuly paid up = 47p

A grand total of, wait for it: 48.175p

Where in the hell do you get this 47 x 47 caper is beyond me.

[elvisrocks] 30/11/2015 08:38

No idea Typo, to me LMI and LMIN are still tracking each other on a 46:1 basis. How the algorithim machines work to achieve that I have no idea.

[graham2405] 30/11/2015 08:36

"my understanding for those who are following their rights (either by wanting to pay 46p cash or tail swallow) is that any investor who held shares on the day it went ex-rights and agreed to follow his rights cannot be "disadvantaged" or "out muscled" by new entrants entering during the Subscription Period."

UTTER TOSH............

[typo56] 30/11/2015 08:35

I think you're getting too hung up about TERP. Would you agree that for anyone wanting to buy LMI now it would be cheaper (and lower short term risk) to buy LMIN than raw LMI?

[elvisrocks] 30/11/2015 08:34

Typo/Graham

PRE RIGHTS VIEW
1 LMI Share pre Rights at 9p + 46p Cash = 55p
Which is the same as
------------
POST RIGHTS VIEW
That same LMI Share at 9p, looking at its ex rights price now of 1.20p (cum rights 10.4p) + 46p = 56.4p
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Which is the same as
Buying 47 LMI Shares on the open market now at 1.20p = 56.4p
------------
Which is the same as
Buying 47 LMIN Shares (which would equal 1 LMI share), 47 times over at 0.025p = 55.225p
------------
Which is the same as
Tail Swallowing at 0.025p - the discount offered of 24.75% in the Rights Issue to existing shareholders effectively being now eliminated by the open market
------------

[elvisrocks] 30/11/2015 08:29

OK Typo, Noted.
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The point I am making, or trying to make, is that during this so called volatile subscription period (or any subscription period for that matter) my understanding for those who are following their rights (either by wanting to pay 46p cash or tail swallow) is that any investor who held shares on the day it went ex-rights and agreed to follow his rights cannot be "disadvantaged" or "out muscled" by new entrants entering during the Subscription Period. This is where TERP comes in, again. It's there for a reason.
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This is different to someone who maybe wants to take a play on LMI/LMIN during this Subscription Period.

[elvisrocks] 30/11/2015 08:22

Good morning Graham, it wouldn't be the same if I didn't ask for your views and your mathematics views on my Post 7373?

[graham2405] 30/11/2015 07:55

Platinum $827 per oz.