RE:RE:RE:The bigger they get, the harder they fallHey Sarge! Welcome back!
Your logic is faultless as usual! I would guess - repeat guess - that the price of BEP.UN is dropping today (biggly as Donald says) cuz of the exact same trade that you are implementing. People have locked in their BEPC shares as a special distribution as of the 27 July record date, and are selling their BEP.UN units in advance. Maybe you have set off a stampede of like-minded investors!
I am not sure how this will affect the BEPC initial market price, but I'm guessing that they will use the 5 day average pre split for BEP.UN and then apply an adjustment factor of 0.80 (since a buy and holder like me will have 80% of the original cost and market value remaining in BEP.UN and 20% of the original cost and market value residing in BEPC).
In our non registered account, we will have to wait for the ACB/FMV for BEPC to be published by Brookfield Renewable. They plan (as they did for BIPC) to use the Weighted Average Market Volume price for 5 days post issuance. Since the TERP acquisition closes on 31 July, and the TERP shareholders were allowed to opt for BEPC shares in payment for the buyout, there could be some wild days ahead as the share price establishes an equilibrium. Also, how many of those "new" investors that Brookfield is seeking will be ready to pounce in the early days?
Cheers!
SargeX wrote: Hey Prab
Actually, given the 4:1 special BEPC share distribution, I'm actually surprised it hasn't fallen more given yesterday was the record date for the distribution.
My logic says that an actual post-split price should be around 0.75 * $70.17 (yesterday's close) = $52,63.
What do others think of my logic on my last 2 posts? (CSC - any comments??)
Ciao
Sarge
prabhatmalik wrote: Why it is still falling like a rock?