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dug
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Username: dug

Post Number: 3553
Registered: 07-2005

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Saturday, May 02, 2009 - 11:00 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



PLACEMENTS

It's a Holder's "dread" when a Trading Halt results in a-" ABC P/L is Pleased to Announce that $X mil is to be raised from Institutions and Sophisticated Investors at Y cents/share for the purposes of..."

Why dread? After all the raising of Capital is the Main Purpose of being Listed as a Public Company.Share the Risk and be Limited in your Individual Liability to the Cost of your shares.Ya don't have to read Wazza Buff [Buffett] to grasp that concept,surely?

No,the dread comes from being a mere Small Player/Pilgrim and the observable Reaction to Placements Share Price Move wise.
I also contend that is also "disliked" because of that patronising phrase -Institutions and other Sophisticated Investors.
I also reckon that the Methods of Placements in a Company is able to be used as an "Indicator".

So Placements are Lawful Fund Raising by Management WHEN they increase the Total Shares on Issue by less than 15% ie 100mil#existing can be 'hit up' by 15mil to 115 mil.
This can be done and if Management in a Year wants to exceed this?Then they have to get Existing ShareHolder Approval by AGM or EGM whatever.

Now this all seems Fair Enuf,hey?Problem comes when you get a Share with Hundreds of Millions of Shares on Issue priced on Market at under $1 even under 10cents.Mid Caps and Below.

It's these types of shares,what is it?
something like 70% of the Total number of Listed ASX shares?
Isn't it that there is 1500 Listed Shares,of which 500 make up the All Ords "Grade" that then split to "Top" 300/200/etc?

Anyway I'm wanting to concentrate on Placement Mechanism and Effects in Non Household Name ASX listed Shares.

So firstly you have to know Who gets to "qualify" as Sophisticated Investors?
Sophistos are Merely High Net Worth Individuals,usually clients of a particular Broker.
They get this Glowing Tag from "Authority" merely because ASIC whoever can not become Involved on some-
"Company misled me,ya Worship,get 'em to Give me Money back" Slater'n'Gordon "Class Action".

No,d'Law says You wanna Play being Sophisticated?
Well then every aspect of Full and True Disclosure,All the PROS and Disclaimer don't have to be done,Independent Expert Reports do NOT have to be Prepared,No YOU are deemed Sophisticated,You have been approached on a "Quick" Money Proposition and it's on ya own head that ya swallowed it!!

See there's Completely Different,Stringent Requirements for Companies to Raise Money from d'Public at Large.You see them applied in IPO documents.IPO's Companies are Paper Work Expensive,Time Consuming dotting i's etc.

Cost and Time,That's WHY,Pilgrims to Mammon,Placements Exist and are a "Righteous Mechanism" that you'll have to Deal With.

.....2B


Even 'til Jaded.

Dig for the sake of it.

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dug
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Username: dug

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Saturday, May 02, 2009 - 11:27 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Now it seems there are some Legal Requirements regarding Placements and Sophisticated Investors.I glanced at some recent news about this issue.From memory it was something about Insider Info action and some conviction because some "clown" used knowing an Up coming Placement as a Trading Tool.

Anyway,Knowing that there's a Placement about to Go Down is the Chief Fear,cause for Disappointment Value in THEY who only got told by News Break ie d'Non Sophisticated!!

I see that there is No Way that a Sophisto when they are approached to participate in Placement can not/even Should Not be able to trade any existing position.
Geezus what do d'Amateurs/General Public expect?What nanny ASIC world do they want Imposed?
Surely ya're just Whinging cos YOU didn't get IN?
d'Old Rich get Richer while d'Battler is Ripped Off!!

That's why I call it being a Pilgrim to Mammon.
The words to absorb in the above paragraph are "Not be able to trade an EXISTING Position".

See the Average Sophisticated Investor MAY not know a danged single Fact on the share they're taking a Place In.Up here in God's own land we had this Sicilian,Liberal Party Senator and Power Broker called Santo Santoro and he is my Real Life Window into d'World of Sophisticated Investors...
but my bride calls
later.







Even 'til Jaded.

Dig for the sake of it.

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dug
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Username: dug

Post Number: 3555
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Saturday, May 02, 2009 - 12:51 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



What is the observable "rip offs" in a Placement Situation?

Well Placements are nearly always at a Price below current SP.
Placements are usually calculated at some discount 20% to a Month/Fortnight VWAP[Volume weigted average price].

The "con/conspiracy" comes in when one wonders about any and all Trading Action that has ocurred during this VWAP period.

Has the shareprice been artifically induced?as an example crosses the mind ie Has Management or even just THEY boosted the price so that the Best Price for the Placement can be Discounted?

Jazz like that?Conspiracy Theories?
Oh one should never "indulge" in such rot!Why that's Thinking Too Much!! What a Cardinal Sin!! etc etc

Well NOT thinking of possible Scenarios,NOT doing the Hard Work that is unravelling for yourself the Mechanics of Share Movement is a Rule for the Automaton.
D'Dumb being led to be Dumber!!

Anyway,I side issue on a Side Issue.

Placements CAN be seen as having a Price Manipulation aspect.
a]It is Normal Procedure to Re Weight one's position.If one has been "offered" a new parcel of a respectable Number of Shares in a Share you already Hold,one must expect that any Existing holding may be Sold Off at any and all Price Above what you know you will be allocated to you,A Sophisticated
Investor.

b]The problems seem to come IMV when the Placement is Desperate and/or in Companies that make a Real Habit of Placements doing a half dozen every year mainly to raise Next Quarters Running Expenses.Overhead chiefly dominated by Directors Wages!!

c]I think to the point of Advocating that Placements in SOME Companies are just some Money for d'Insiders like the Directors Arm's Length,Non Detectable "Investor"Vehicles/Shell Companies.Insiders of directors Mates Variety.
Knowing that there going to get say $100,000+ of shares at 5 cents on a near future date they proceed "by Arrangement" to Pre Sell at a Higher Price so they can Settle the Placement with All Ready Garnered Market Money thus pocketing the arbitrage of 20% without having actually shelled up ANY of their Own Money.
Do you follow?

Yeah,Yeah ASIC wouldn't allow that!!
Question is would ASIC be Bothered or even Competent enough to Thwart such "sophisticated" activity?
Not only Can but do they MAY?
Remember your Mother's Grammar Lesson?
You Can Do such'n'such but you MAY not do [d'same]such'n'such.
Should and Would is expanded,in my lexicon by If only.

Anyway,it all boils down to that the phrase "with Institutional and other Sophisticated Investors"does NOT hint/innuendo/semiotically hit ya head with any thoughts that ABC company
has garnered some BigTime Long Term,Run the Business Plan thru their Sophisticated Systems and have so Endorsed any other "pilgrims" Faith in bleeding ABC.

Sorry,Pilgrims to Mammon but the Sophisticated could have been and Gone before you even really heard about their involvement.I say that's a FAct but in Rumsfield Speak it's called now a Known UnKnown.

Another side issue of Placements is that some start to think that the Placement Price is some company "endorsed" calculation of Value.These "some" are usually d'dreaded Disciples of Pure FA but I doubt any of these "inhabit" IC so I'm free of having to care or write an iota for their Benefit.

I'll sign off for the Day now.Review what I've written and find some angles to expand and delve into on Placements.Of course there's the Main Intellectual Raison d'Etre of Negativity to Placements ie one of the main FA cornerstone Objections to Placements,DILUTION.Yeah Dilution is for Duds but,well,I need to ponder on that a bit.

I'd appreciate some reply to these posts if only so I get an email connection to this particular thread.
I'd like some input on any Law that pertains to Placements but,please,can it be in your own words?Not some link to the ASX site whatever?Like don't make me wade thru some dry,wherefor and henceforth PIFFLE.Give us d'Gist in your own Mind Set preferably in more than 50 words,ideally in a dozen paragraphs.

cheers.


Even 'til Jaded.

Dig for the sake of it.

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resillent1
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Username: resillent1

Post Number: 665
Registered: 10-2006

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Saturday, May 02, 2009 - 01:19 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




dug wrote on Saturday, May 02, 2009 - 12:51 pm:

Another side issue of Placements is that some start to think that the Placement Price is some company "endorsed" calculation of Value




If the company is not raising at a price HIGHER than their perceived value of the business than they are making a POOR scrip for cash swap. Desperate, stupid or placing self interest above shareholders are the only logical reasons for making a poor swap.


ps

nice ramblings.

(Message edited by resillent1 on May 02, 2009)


The problems that exist in the world today cannot be solved by the level of thinking that created them.
-- Albert Einstein

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dug
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Username: dug

Post Number: 3557
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Saturday, May 02, 2009 - 07:40 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



With TRUE sincerity Resile,I want to state that I really appreciate your response.You may have MisQuoted me but what does that matter between "friends"?Fellow Seekers of TRUTH ie Pilgrims to Mammon?

So you're saying that Company Directors Should Ideally have some VALUE Price of a Company that THEY work Placements as Above being this Insider/Calculated Figure Against?

Is this the Company that you seek?Management that performs Ideally to what, say Eblode's Mother,handed Down to Eugenio, from One who has Years of Share Market experience says-
It all Boils Down to who,WHO is Management and what They Do and that's it.

End of Story-Back High Flyers/Glory Boys,
Save having to make ANY DIY attitude
Face it YOU will NEVER know,
Admit You are a Pawn investing in a World of Kings[or more pertinently "Queens"]
Give Up,Pilgrim.The Market is UnKnowable so Follow the Leaders and that's how a peasant becomes.well,Viable?

Resilient1,ya havin' some lend of me,ain't ya?

Like d'Ideal is flogging Placements ABOVE "perceived value"?

Aww no wonder there's Prats sprouting that FA has only a swearing term connotation!!
Sprouting such 'insight'as Be All and END All of any debate/conversation of FUNDAMENTAL ways of Thinking.

Resilient,I reckon that when a Placement ABOVE the current Share Price is Announced that such a circumstance is an Indicator to "d'Small" that they are being CONNED.It's a Flying Flag of being Diddled,resilient and I have CVI as a prime example of recent Proof.

WhattaYaGot,resil as an example of a Current Listed Company that fulfilled your criteria Positively?

cheers.


Even 'til Jaded.

Dig for the sake of it.

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resillent1
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Saturday, May 02, 2009 - 09:42 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Dug

I'm not really sure what your last post meant - so I'll just make up what I think it said.

The point of my post was:

With DYE as an example;

If the managers think the business has a fair value of say 50cents, than a raising at 90cents makes good sense because they are swapping something worth 50cents for 90cents.

If the mangers think the business has a fair value of 1.50 than swapping it for 90cents is a bad deal and not in the shareholders interest. Something other than working in the owners best interest has to be driving their decision.

A raising in the absence of specific new opportunities should in theory tell you that management thinks the company is currently overpriced. That is if the management is any good.

If management thinks they can apply the capital advantageously to specific new opportunities than the raising should be offered to existing holders through a rights issue with enough information to allow proper analysis.


The problems that exist in the world today cannot be solved by the level of thinking that created them.
-- Albert Einstein

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dug
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Username: dug

Post Number: 3561
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Sunday, May 03, 2009 - 11:48 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



OK,specifically to a Current Placement.

I've made some answer in the DYE thread Long Term that has shown WHY Dye is doing an OVERSEAS Placement AND A Rights Issue for Australian Holders ONLY.
So that part of yours about What Should happen instead of Placing in Australia ie All ShareHolder Participation is "covered" at least somewhat.

We can move on to this Only Good Management Practise is to have Management Perceive Value at 50 cents and then get 90 cents as a Placement Price.

Well one Formula that I know that is applied on these lines is the setting of exercise price for EMPLOYEE Options.
This is an Accounting Principle that Good Corporate Governance dictates a Must Do to raise above Shonky Self Interest,Look after yaself Directors and Blast the ShareHolders.
Know about this,resillient?The Employee Option LAW?

Well DYE is issuing and is going to continue Issuing Employee Options at 125.

Now are you going to continue this Placements are BAD IF they are made BELOW Management's Percieved,Calculated Insider Value "stuff"?

If so give me some clue about How such a value is Calculated?

I'd like to point out that 90 cents is pretty much in d'Middle of DYE's Year High and Year Low so this Rights Issue is "attractive" to both Doubler Downs and Doubler Ups.
Further 90 cents is the DownTrend Break Out Price.

Also Rights Details have NOT been Released so we are in Limbo Land.The ONLY thing known is that the Cut Out Date for Rights was 30th April.Too late now for SideLine Gunner Buy but not surers.

cheers.


Even 'til Jaded.

Dig for the sake of it.

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resillent1
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Username: resillent1

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Sunday, May 03, 2009 - 08:29 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




dug wrote on Sunday, May 03, 2009 - 10:47 am:

DYE is doing a $7mil PLACEMENT to OVERSEAS Investors AND a $3mil Rights Issue to OZ Holders.This is SHEERLY being done this way because it is UNLAWFUL to Rights Issue to Overseas Investors[as far as I know]




It is not unlawful to do a rights issue to overseas Investors. Its just that most countries with the exception of NZ have more stringent rules regarding rights issues and the level of information that must be provided to their citizens. So many Aus companies limit eligibility for rights issue to Aus and NZ residents rather than provide the information required.

They are not doing a rights issue to Aus holders. A rights issue requires a prospectus and would give current holders the right to buy new shares on a prorata basis according to there current holdings.

They are doing a share purchase plan which does not require a prospectus and limits issues to a max of $5000 per shareholder.

------------------------------------------------------------


Dug, if you owned a share that you believed was worth 50c and I offered to buy it for 90c would you sell it?

If you thought it was worth $1.50 and I offered 90c would you sell it?

With a capital raising you are selling shares and buying cash. It doesn't make any more sense for a management to sell underpriced shares than it does shareholders. A logical manager would only raise cash when they believe the share price is overvalued. The exception would be if they could apply the cash profitably - in which case the opportunity should be offered to existing shareholders first by way of a pro-rata share issue.


The problems that exist in the world today cannot be solved by the level of thinking that created them.
-- Albert Einstein

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dug
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Monday, May 04, 2009 - 09:36 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Very Helpful,resil that distinction between a Rights Issue and a Share Purchase Plan.How often are Rights Issues done in MidCap and say below $100mil Companies?Any examples currently?
I was going on the concept that it was preferably in holding "penny" shares that did,now SPP's,than it was to be in ones who Regularly Feed to Sophisticated Investors by Placements.
Now I realise that I should Rank such shares that do Rights Issue on Pro Rata Basis as definitely Higher Still.
Why?because they require more Legislated Back Up to Dare.

It all helps,hey resillient but it all comes down to actually Whacking ya money down knowing it's at Risk.
You prepared yet,resillient to give a fellow Pilgrim to Mammon an example,a single share you currently Hold that gives some Clue on your Method?

regards.


Even 'til Jaded.

Dig for the sake of it.

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dug
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Monday, May 11, 2009 - 12:53 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Been thinking about your Placement comments,resillent1 and specifically to DYE,this SPP has not been Good shareprice wise because it Closed/Went to Record date on the same day that it was announced.30th April.
This allowed NO Trading letting non holders to buy to take advantage of the 90 cent $5000 "deal".Took away that element to Buy pressure.Increased Sell pressure on any price above 90 cents that Holders could get to "finance" their Take Up.
Doesn't bother me.I remember all these $10 buys back years ago on the last SPP at 110 that closed in a month after announcement.Dave Gellbaum stuck his head up for that time buying everyday and "skewed" the SPP results[when the SPP actually got transferred into your HIN shareprice was at $2ish]

Anyway,gotta go.
regards resil.


Even 'til Jaded.

Dig for the sake of it.

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captain_chaza
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Thursday, May 14, 2009 - 06:36 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Ahoy Officer Resillient ONE

Has there ever been a better time in history to "Milk The Markets" for Cash?

I think by the time this SMALL Window in the Time of opportunity closes we will be in Record Volumes if we are not already there already?

Being Cashed Up in these times is Good if not a Very Very Good Tack IMHO

ie: "Dilution" in these times is a small time pain for a longer term gain

Diution and Restructuring of the Major Indecies should not be looked at as if the Skies were falling in But as a minor correction and an oppotunity to Buy on the Dips in Bull Markets



Salute and Gods' Speed


(Message edited by Captain_Chaza on May 14, 2009)


"While we stop and think, we often miss our opportunity." Publilius Syrus, 1st century B.C.

"I believe the future is only the past again, entered through another gate."
Sir Arthur Wing Pinero 1893

"There are two times in a man's life when he should not speculate: When he can't afford it, and when he can." Mark Twain, 1897





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captain_chaza
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Thursday, May 14, 2009 - 07:43 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



PS: Crikey!
You can't blame the consumer for not spending money when they are busy accumulating Shares at bargain basement prices and at huge Discounted offerings?

There is only a 'such' amount of money that goes around

Salute and Buon Appetit







"While we stop and think, we often miss our opportunity." Publilius Syrus, 1st century B.C.

"I believe the future is only the past again, entered through another gate."
Sir Arthur Wing Pinero 1893

"There are two times in a man's life when he should not speculate: When he can't afford it, and when he can." Mark Twain, 1897





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dug
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Wednesday, February 03, 2010 - 10:18 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Daily Breaders-

it's this thread Side Issues in Hilarius Hall of Fame,I'm thinking of reactivating.
Are you getting it and don't want to?There is a mechanism in your profile.Email Control that will do it.

I haven't updated my knowledge of profile email options but one is
Tick that you Only want emails from threads you participate in
and NOT just Hilarius Hall of Fame threads [of which Daily Bread is a part]

alternatively,there used to be a 'division' of eg Hil Fame Thread into it's individual bits so you could tick just daily bread and not get anyothers.

this last bit is what i want to check is in place still.get back to you.

in meantime please advise whether this post has turned up to all daily breaders.[you can ps on any daily bread post,don't have to come here.]
market mad-this is how i write,trust me it's worse when i talk,i just ain't orthodox and not offended if you can't follow and/or don't want to know.don't expect you to change and i just cain't.
it's a bohemia ding,mate.


Even 'til Jaded.

Dig for the sake of it.

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