BSL - Bluescope Steel

Oh dear lord its tempting isn't it to bail now. I took some of the SPP so my avg purchase price is just above the 2 dollar mark, and there's plenty of opportunites that will gain faster than BSL will recover. Must... stick... to... discipline....

no seriously if it gets to around the mid 2s it will be hard not to cash in half esp. if it happens before June 9th

BSL - Bluescope Steel - calcs

bonkerrs said:

Re your post # 258:
.... Like this:
Entitlement: 1.55 @ 5,000 share = $7,750
Sell my shares now: 2.15 @ 5,000 shares = $10,750
Profit: $3,000 (gross)

And I'll still have my original 5,000 shares for long term prospects.

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I think your calcs are incorrect - in the above you even removed the cost of your original purchase ! So be careful.

Also to estimate the short term position outcome lets assume that after 8Jun09 the price will settle 50% in between $2.05 and $1.55 , i.e. $1.8 (nobody knows where it will rest, so lets assume avg 50% distance); And then you calculate your position (broker fees excluded):

Orig buy: 5k @ $2.68 = $13,400
Sell your shares now: 5k @ $2.15 $10,750 (it is $2.24 now, but I use your SP for comparison purposes
- temp position: 10,750 - 13,400 = - $2650 (loss)

Buy new lot as an entitlement: 5k @ $1.55 = $7,750
Sell your new shares after 8Jun : 5k @ $1.80 = $9,000
- temp position: 9,000 - 7,750 = + $1250 (profit)

Overall profit / loss : $1250 - $2650 = - $1,400 (loss)


So to profit in your situation you will have to (if you sell today 5k @$ 2.24 = + $11,200) sell a few cents above $2.00 mark.


<< sell @ $1.99 will make you BREAK EVEN (+ add brokerage costs) >>

Re: BSL - Bluescope Steel - calcs

ozbecool said:

I think your calcs are incorrect - in the above you even removed the cost of your original purchase ! So be careful.

Also to estimate the short term position outcome lets assume that after 8Jun09 the price will settle 50% in between $2.05 and $1.55 , i.e. $1.8 (nobody knows where it will rest, so lets assume avg 50% distance); And then you calculate your position (broker fees excluded):

Orig buy: 5k @ $2.68 = $13,400
Sell your shares now: 5k @ $2.15 $10,750 (it is $2.24 now, but I use your SP for comparison purposes
- temp position: 10,750 - 13,400 = - $2650 (loss)

Buy new lot as an entitlement: 5k @ $1.55 = $7,750
Sell your new shares after 8Jun : 5k @ $1.80 = $9,000
- temp position: 9,000 - 7,750 = + $1250 (profit)

Overall profit / loss : $1250 - $2650 = - $1,400 (loss)


So to profit in your situation you will have to (if you sell today 5k @$ 2.24 = + $11,200) sell a few cents above $2.00 mark.


<< sell @ $1.99 will make you BREAK EVEN (+ add brokerage costs) >>

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Lets disregard the original shares and price I paid for now.

My original 5000 shares has allowed me to an entitlement of 5000 'new' shares at 1.55. I sell the 'new' 5000 shares before receiving it (I currently own 5000 shares), locking in profit. So basically, it can be looked at like this - I bought 5000 shares for 1.55 and I sold them for 2.27 (todays price). I know I don't physically have them yet, not until 9th June. But I have paid for it and it is locked in to receive those shares. Does this make sense, I really do have troubles explaining myself!

Now, back to the original 5000 shares. After all the above I will be left with 5000 shares (at 2.68) for my long term hold. Plus the profits of the above exercise.

Re: BSL - Bluescope Steel - calcs

bonkerrs said:

Lets disregard the original shares and price I paid for now.

My original 5000 shares has allowed me to an entitlement of 5000 'new' shares at 1.55. I sell the 'new' 5000 shares before receiving it (I currently own 5000 shares), locking in profit. So basically, it can be looked at like this - I bought 5000 shares for 1.55 and I sold them for 2.27 (todays price). I know I don't physically have them yet, not until 9th June. But I have paid for it and it is locked in to receive those shares. Does this make sense, I really do have troubles explaining myself!

Now, back to the original 5000 shares. After all the above I will be left with 5000 shares (at 2.68) for my long term hold. Plus the profits of the above exercise.

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I don't believe that's how it will be worked out for CGT purposes, ie you can only offset your sell against what you own at the time of sale(someone correct me if I'm wrong). So you may well work it out the way you've mentioned for your personal finances, but when it comes tax time you will need to report it as ozbecool has mentioned.

cheers

Re: BSL - Bluescope Steel - calcs

MACCA350 said:

I don't believe that's how it will be worked out for CGT purposes, ie you can only offset your sell against what you own at the time of sale(someone correct me if I'm wrong). So you may well work it out the way you've mentioned for your personal finances, but when it comes tax time you will need to report it as ozbecool has mentioned.

cheers

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That's right. It doesn't really matter that you have already paid for the new shares. According to the timeline in BSL's SPP offer document,
Quote
Issue of New Shares under the Retail Entitlement Offer 5 June 2009
Normal trading of New Shares issued under the Retail
Entitlement Offer 9 June 2009
Unquote

So if you sell any of your BSL shares prior to 9 June, they will be deemed to be shares acquired apart from and separately to the SPP offer, and thus for CGT purposes will have a different cost base, ie not $1.55.

That's how I understand it as well. Have already locked in my capital loss and waiting for those 1.55 cheapies to come in

Nice bump today to facilitate above, but market depth is lining up however against any more substantial gains in the v short term, I think a lot of holders are being tempted into this course of action by the recent rally from the $2 mark.

Of course we may get a positive outcome out of the china benchmark price standoff and make all of us who've jumped the gun already look foolish

johannlo said:

That's how I understand it as well. Have already locked in my capital loss and waiting for those 1.55 cheapies to come in

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I'm still considering doing the same so I can reduce my capital gain for this financial year........I've gained more than I expected, although I'd have to reduce it by a heck of a lot more than that to bring it back to were I had expected for this year

Then again I could just keep both parcels for the long term as I had originally planned for my initial buy

cheers

Either way its still below my initial punt at 2.62 and if the iron ore benchmark saga w/ china finally resolves positively it can only be good for all holders. I don't believe they're going broke despite all the recent bad news and there can only be upside in the long term.

johannlo said:

Either way its still below my initial punt at 2.62

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Not by much. Closed 2.60 today, up 22c. It's interesting that there's so much talk of selling here, when this has to be one of the fastest rising stocks on the market.

Kremmen said:

Not by much. Closed 2.60 today, up 22c. It's interesting that there's so much talk of selling here, when this has to be one of the fastest rising stocks on the market.

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I think many were taken by a big surprise. I actually sold my original stock a few days ago "to cash in on a <past $2.0 rally>" - to my regret of course as the SP closed at $2.60 today. So again the TREND FOLLOWING TRADERS strategy to never sell a climbing stock proved correct. We learn all the time ...

Any thoughts guys on the price the BSL will start trading on 09 June ?

any reason why BSL rallied so much yesterday? other than on higher commodity prices? .

ozbecool said:

So again the TREND FOLLOWING TRADERS strategy to never sell a climbing stock proved correct.

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Looking at the chart, I expected BSL to appear in the "outstanding breakouts" thread. It's blown through its averages, closing on/near highs for each day, high volume, etc.

The interesting question is: who is buying? Those $100m/day worth of trades aren't mostly small investors, are they?

Kremmen said:

Looking at the chart, I expected BSL to appear in the "outstanding breakouts" thread. It's blown through its averages, closing on/near highs for each day, high volume, etc.

The interesting question is: who is buying? Those $100m/day worth of trades aren't mostly small investors, are they?

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I agree, the volume has been very high and it has out-performed most stocks on the ASX200 (today being another example of a great day); been in and out of this one a couple times since last month and regretted each time I sold thinking it hit some resistance, only to smash through it the next day. Also got some coming in at 1.55 for the 1:1 offer that came up a while back so I already have some on the way come June 11 or whenever the SPP date is.

I heard a rumour about BSL a couple months back, mostly regarding very large foreign investment and potential takeovers, so it could potentially be some of the big boys putting money in, they seem to know more than us commoners But I don't want to speculate too much since it's now allowed on ASF (fair enough), but it's good enough to have me partially invested and interested in BSL lately.

And I personally think the last offer of 1.55 per share was ridiculously cheap and under-valued the company quite badly. But again my opinion and not based on my usual charting analysis...

I am a relatively newbie and have been trading since early october, before this trade I had only ~$200 above my initial capital of $4000. (Mostly from buying 200 stocks in MQG.AX @$16 before its bottom and selling @$18 because I couldn't stomach the bad news. Short sellers are geniuses, I tell you.) That, and the trade with NAB @$16 and selling @$18 (again...) covered all my previous losses between December and March. (No losses before then =D )

This trade with BSL, however was almost like a jackpot.

I bought almost 1.5 k BSL stocks when they were coming down from $3, for average price of $2.5. (688 @ 2.79 and 800@2.29) <--Lucky for the 2nd go. Looking over its company reports and previous announcements and future earnings forecasts I was thinking this stock was being somewhat undervalued. They also needed cash, but I thought that it was a strong company and if they really wanted to, can either locate additional finance or raise capital. (and hoped for the latter because I saw how the last capital raising was generous to existing retail investors.)

I bought into BSL thinking I was going to invest long term, and will stop with this short term business of 'gambling' when I added my total transaction fees in previous 6 months to be over $1000....

It fell to below $2, but I had learnt my lesson with MQG.AX, and believed firmly in my previous analysis of the company and held it. In hindsight, Good decision.

In the 'post 2.0 rally' it was going up like 5% a day. So I put the 'long term' into the back burner. This was frightening, and I was getting jittery (again) about June 9 coming up....
so I raised my stop to the previous day's closing price every single day...

Then the other day when the closing price was 2.72, I set up stop at 2.7, and then it fell from 2.74... and I sold it at 2.67... for $220 profit. (based on average price 2.5)

Yesterday it slipped even more, down to 2.64... Now its 2.76 again and looking to keep going up. damn. (On the bright side, if my stop was at 2.6 I'd have an even worse result...)

I did take advantage of the capital raising... Too bad I didn't have any extra cash to apply for extra entitlements

I'll try long term again.

EDIT:
One thing I've learnt. Accounting is really useful. I did it in my first year in my commerce degree. Since I started reading financial reports + everything about companies I was going to invest in, I haven't lose a dime. (Its probably more because of improvement global economic outlook though) Just need to stop being a coward and I think I'll increase my earnings.

has anyone got their new shares online yet?

I though it would be the same time as Macq Bank and my Macq Bank shares has been online on friday?

airpoe said:

has anyone got their new shares online yet?

I though it would be the same time as Macq Bank and my Macq Bank shares has been online on friday?

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Yes, mine were issued around 6pm Melbourne time on Friday (5th June). They were also reflected as holdings in my E*Trade account as well. Unless you meant were they issued during trading hours on the ASX on Friday (10am-4pm), then no they were not active then.

If you want to find your holdings, visit the Link Market Services website and use your Holder Identification number (which should have been issued with the paperwork you would have received from Bluescope a couple weeks ago) to check your holdings.

M34N said:

Yes, mine were issued around 6pm Melbourne time on Friday (5th June). They were also reflected as holdings in my E*Trade account as well. Unless you meant were they issued during trading hours on the ASX on Friday (10am-4pm), then no they were not active then.

If you want to find your holdings, visit the website and use your Holder Identification number (which should have been issued with the paperwork you would have received from Bluescope a couple weeks ago) to check your holdings.

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I checked my holdings & they are there, but I went to Commsec, its still not there?

My Belldirect had my Macq Bank listed friday morning.

Maybe Commsec is a bit slowwww

alter1217 said:

I bought into BSL thinking I was going to invest long term, and will stop with this short term business of 'gambling' when I added my total transaction fees in previous 6 months to be over $1000....

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If you are referring to brokerage. Isn't it a tax deduction? I hope so as I have been working out my profit/loss calculations based on it being so.

applied for 50% more than entitlement and got it
these capital raisings are a great arbitrage opportunity

craigj said:

applied for 50% more than entitlement and got it
these capital raisings are a great arbitrage opportunity

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not really arbitrage opportunity but very close, depends on the market & price.

Dare I ask how many were you entitled to & how many did you get?

Also have you sold them?

I was thinking of selling but I think it has potential so I will hold until something dramatic happens