KFL - discount to diluted NAV

[alokdhir]

^^ this is interesting, i had assumed that there was little to no dilution effect, (rough numbers here ) say there was 400M in the pot (320M shares) ~1.25 per share.

someone purchased and exercised their rights of say 10M shares at 1.27 the pot is now 412.7M and the number of shares on issue = 330M, so kind of making it neutral, (depending on how close the rights issue is to current share price)


Am I way off the mark on how this rights issue plays out Alokdhir? i'm keen to understand a bit more about the dilution, and what my best option to counteract it is.

Aah... actually i think I get it... does the dilution occur when the rights issue is significantly below the current share price, because no-one in their right mind is exercising rights at above current trading price..

Yes ...dilution happens if exercise price is less then current NAV ...more the difference more the dilution .

Say for example BRM current NAV 75 ...on exercise date its say 80 Cents ...exercise price is 63 ...4x80 + 63 = 383/5 = final exercise day NAV 76.6 ...assuming all 100% warrants got exercised ....

So if original head shares owners who got 1/4 warrants free ....they needed to sell their warrants for 13.6 cents to not loose to this dilution effect of warrants exercise

Many can sell higher then that and some below ...higher ones made extra money at the cost of less then 13.6 cents ones .

Currently KFL warrants maybe dud so no dilution for head shares but some already sold theirs and made bonus extra ...adding to their returns

When to sell warrants if u can not exercise is a market call ...many times u loose selling early and many u win like this time ...some sold at 12 cents ...ie extra 3 cents bonus per share

[mike2020]

Actually you are purchasing the shares in the fund at a discount to market rate so yes any on market purchasing with warrant monies would in effect lower the nta per share. My hope was buying now would be good for the fund longer term.

[alokdhir]

Last day of CUM dividend of 2.65 Cents ...Can it cross $ 1.25 now or after NAV of $ 1.335 ?

[ronaldson]

Last day of CUM dividend of 2.65 Cents ...Can it cross $ 1.25 now or after NAV of $ 1.335 ?

Won't the fact of going ex dividend tomorrow drop the share price in theory by 2.65c? And at some point that dividend liability gets factored in to the NAV. So it is still very unlikely warrants will be exercised in any material number.

[alokdhir]

Won't the fact of going ex dividend tomorrow drop the share price in theory by 2.65c? And at some point that dividend liability gets factored in to the NAV. So it is still very unlikely warrants will be exercised in any material number.

Very little hope for warrants ...but thats good for head share holders eventually...also opens the door for more attractive NEXT warrant issue ...

[alokdhir]

KFL NAV catching up with underperformance on Friday ...today up 2 cents so far !!

[bull....]

KFL NAV catching up with underperformance on Friday ...today up 2 cents so far !!

lets see if we get big plunge after ex again

[alokdhir]

lets see if we get big plunge after ex again

Now some have got smarter ...they dont let it spurt on last cum day ...so not much plunge scope ...but still 1.20 can be touched in next 5 days !

[alokdhir]

Today's ex divvy NAV maybe higher then cum divvy last NAV of $ 1.3316 ...wont that be nice ...in two days full quarter's divvy recovered ...GO FPH / IFT

[alokdhir]

[QUOTE=alokdhir;1055644]Today's ex divvy NAV maybe higher then cum divvy last NAV of $ 1.3316 ...wont that be nice ...in two days full quarter's divvy recovered ...GO FPH / IFT[/QUOTE

https://www.nzx.com/announcements/432416

Thats the power of blue chip. growth stocks ...actually ex nav more then cum in just two days !!