Smith (ds) Share Discussion Threads

[churchtower] 15/7/2018 12:10

GRS - Reluctantly ? Are you seriously suggesting that the underwriters took on their commitment to this rights issue reluctantly. They will be delighted as would I to take on any number of DS Smith shares at 350p.

[gettingrichslow] 15/7/2018 11:15

Yes there will because the underwriters are taking them up reluctantly and will be trying to move them on afterwards...

[bscuit] 15/7/2018 10:05

The elms of underwriting may well include a commitment to take non-taken-up shares so there will no downward drift as you suggest.

[gettingrichslow] 14/7/2018 13:14

Dogwalker, I will let them lapse and then decide whether to invest the cash in SMDS or elsewhere when the dust has settled. If you think about it, in any RI, the rump of unexercised rights that are left at the end then need to be sold off to buyers who weren't otherwise intending to buy, which must have a downwards effect on the share price.

[gettingrichslow] 14/7/2018 11:06

Dogwalker, not quite, the question wasn't about why he has faith in SMDS, it was about why he decided to buy more thru the RI (rather than in open market). It seems to me that many people seem to enlarge their holdings when RIs are announced when they weren't really planning to beforehand. In other words, they are 'enticed in' by the RI, rather than it being a premeditated decision by the investor. On your other point about RIs creating 'a recipe for immediate share price improvement' I'm afraid the evidence suggests the exact opposite (this is a much researched subject)!

[dogwalker] 14/7/2018 10:03

g-r-s,You asked Churchtower why he subscribed to SMDS, not some almost invisibly tiny biotech which no-one's interested in !
I would choose the word 'faith' rather than 'loyalty', not that anyone's asking.It's a pretty safe bet since everyone has to have at least some form of it before they do anything e.g. getting out of the right side of bed in the morning.

[gettingrichslow] 14/7/2018 09:27

Churchtower, thanks for your answer, I honestly wasn't being critical at all I was just interested in what was driving your and others thinking. The 'loyalty' argument is an interesting one but not one I subscribe to whatsoever. Have a look at what's just happened to a company called 'N4P' (check out their discussion board on this site) for a great example of how that kind of loyalty doesn't get repaid by management who will still take their salary and bonuses and run when things go wrong.

[dogwalker] 14/7/2018 08:55

An aspect too is that a rights issue is a one-off special event. So the increased exposure to the company , & buying of its shares, is done in a concentrated burst. The people who just subscribed aren't as likely to sell. This creates a temporary imbalance. Together with the significantly greater size of the company (attracting interest in itself from one or two institutionals) & its ability now to achieve its targets, you have a recipe for immediate share price improvement.
If you're glued to your screen all the time no doubt you can trade cleverly enough to catch the swings better than simply subscribing to the set menu.

[mirandaj] 14/7/2018 07:19

churchtower,

I agree with you and am taking up my full entitlement. DS Smith will be a much stronger company after this and we must not forget their plans in America. I have also been buying more over the years.

[churchtower] 14/7/2018 06:18

GRS - your somewhat critical enquiry of my actions appears to not take on board the possibility that certain shareholders have an old fashioned belief in loyalty. This Company has served me well over the last several years. During that time I have indeed added steadily to my holding, on nine occasions to be exact, none of which involved a rights issue. This is simply my way of identifiably showing Management that I support their expansion plans. From the tone of your enquiry you may not be able to grasp this concept, I just hope that I may be wrong.

[marksp2011] 13/7/2018 23:25

Slow

Sensible. You are right - looking at it dispassionately it is merely a request by the company for more money from its shareholders rather than borrowing from the bank. It still has to pay a return as a divi but that is a return it can decide not to make if things get tough.

From an investment POV a RI is merely an increase in exposure to the company

[gettingrichslow] 13/7/2018 19:45

Churchtower, a serious question and I'm only directing it to you because you happen to have just announced that you have taken up your full rights entitlement. My question is 'why?'. The reason I ask is this: if you wanted to expand your holding you could have done so in the normal way without needing to wait for a rights issue; you're not getting them any cheaper than you'd normally get them, despite many on here not understanding that point; so it's as if you've only decided to do it because they invited you to? What other reason could there be for buying more NOW? And please don't mention commission because with the tiny commissions payable these days it's irrelevant.

[dr_smith] 13/7/2018 19:26

Phillis.
The market is to match buyers and sellers with share price to balance the two.
Each party seeking to make money in conventional/honest manner.

There are many tools, methods by which market is manipulated, so the "fair price" is not so fair.
Sometimes manipulation is more blatant or more high profile than others.
e.g. Post office sell-off was biased so that supposed neutral faciltators were also big receivers/sellers, profiteers by nefarious means.
I am sure you are aware of many ways in which market can be manipulated and reasonable you should question a posters thoughts and opinions, but to be needlessly offensive and condescending, and without foundation, is more a statement about yourself.

[dssmith51] 13/7/2018 17:42

Being a bit of a gambler and the fact I have confidence in the top managers of SMDS I will take up either 50% or ALL my rights. Assuming a soft brexit I have belief the stock will rise to 520 - 530 in the relative short term. The stock will be up and down until it settles after Brexit. However if NO BREXIT actually take place then the stock is likely to go to 550 - 560 in line with the FTSE. Lets wait and see.

[phillis] 13/7/2018 16:53

The rights are tradeable
People trade them and try to make money
Why is that manipulation?

The agenda is not hidden - it is to make money you numpty

[ianood] 13/7/2018 16:52

curchtower - if you feel like that you shouldn't buy any equities at all. I could understand such a comment about some/most AIM stocks but not a FTSE 100 stock.

[churchtower] 13/7/2018 16:15

EJ - If only it was as simple as that. Too many other possibilities exist created by those with hidden agendas and the ability to manipulate share prices to their advantage.

[dogwalker] 13/7/2018 15:15

Fair enough DeanForester ! I expect istead to decide to take all ours up on Tuesday after a suitable period of further dither.Great company, future etc.

[deanforester] 13/7/2018 14:24

I've put the order in to sell my rights. Taking them up would make my holding of SMDS too heavy for comfort. The sale should take place some time on Monday, as it looks like they aggregate the orders received the working day before.

[phillis] 13/7/2018 11:43

Well it has to be completely different unless you can build a case to prove otherwise
Otherwise your comment is completely irrelevant