RE:RE:all said- 13MM rights traded today- only 6.8 on TSXTroyahorse wrote: While retail can only excersice option at .035 these guys are allowed to buy at .005?
No wander why the frenetic buying.
Problem is they will be probably dumping at .02 to .03 with a great profit marging while keeping the value low.
Its that a correct assumption?
thanks
No. Buying a 'right' in the market at $.005 allows the buyer to exercise that right to buy a share at $.035 for a total cost of $.04.
The reason that the rights value has fallen is that they expire on Monday and, if not exercised on time, they are availableto the issuer, so to speak, at 0 value. The issuer will then distribute them at 0 value, pro rata to over allotment rights claimants.
These rights have fallen in value to $.005 because it will be more difficult to exercise them after most brokers' deadline.
Brokers place artificial deadlines to insulate themselves from incomplete transactions. While the issuer has a deadline for exercising the rights, I believe they will honour all transactions in the pipeline at deadline or face very negative public consequences at a time they need positive support.
Rights issues are a circus and best left to settle down after closure. CQE will appear much clearer next week when the rights issue is behind us and share price can be evaluated on fundamentals.