Share rights trading - Aussie Stock Forums

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  1. #1
    Jnr VP of Photocopying Dan_'s Avatar
    Join Date
    Feb 2005

    Question Share rights trading

    Hey Everyone,

    I was hoping that someone can clear up the following for me

    I currently hold some shares in WEZ (dam tip sheet ) and they are releasing a rights issue based on 11 shares for every 10 held @ a cost of $0.06 cents per share.

    Now to my understanding there are three avenues of action to take, which are as follows,

    Take up the full entitlement of shares,
    Take up part of the entitlement of shares,
    Take up none of the entitlement of shares,

    To date I have done nothing in regards to the above and have noticed today in my E*Trade account that the full amount of entitlements have appeared under the code WEZR

    Now this is where I get confused and would appreciate some clarification on the following.

    Does this mean I can sell my rights on the market to anyone at a market price?

    For example, say I sold them at $0.01 cent per share then the buyer would actually end up paying $0.07 cents per share?

    If I do sell them then I get the proceeds from the sale even though I have taken up no action earlier?

    If I want to retain part of the entitlement do I just sell the other half at whatever price?

    What if I wanted to take up the full entitlement? Do I fill out the rights prospectus and I assume the WEZR rights will convert into WEZ ordinary shares?

    If I don't wish to take up any of the entitlement and I don't sell the rights are they simply forfeited?

    Sorry for the newbie questions but I would really appreciate you assistance in clarifying my understanding of the above.

    Thanks again for your assistance
    "Did you see the bubble?"

  2. #2

    Default Re: Share rights trading

    Well if the rights have appeared in your etrade account, they are renounceable rights which means you can sell them to another person
    If you sold them at 1c then buyer would be paying 1c + exercise price to convert (+brokerage to buy rights)

    If you sell them you will receive the sale price x number you own - any brokerage you need to pay

    If you want to only take up part of the rights then yes you can sell some (if its cost effective)

    If you want to take any entitlement (full or partial) complete the forms and send funds as directed by the company

    If you do nothing the rights will lapse, this is the worst outcome and your diluting your shareholding (you own less of the company) than before

  3. #3

    Thumbs up Re: Share rights trading

    Thanks for the response BVB fan... I really appreciate your help... now to find someone to buy them
    "Did you see the bubble?"

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