For those who want to consider the rights offerSome may doing nothing is better than to take part in the rights offer. Here is some more math.
I'll use my
previous example of how to lower cost average without putting new $ A: The person has 1000 shares at $1 cost average. Their investment=$1000. They do not take part in the rights offer. Do nothing.
B: By selling 700 (70%) at 6 cents and buy the rights shares at the least amount (x6.7)
they will have a new total of 2310 shares, a new cost average of $0.43
Then at some point in the near future, they decide to close their position and move on.
Here is their final sale.
1. SP=$0.01521
A=$15.21 or 98% loss =[(1000x $0.01521)-$1000]/$1000
B=$35.13 or 96% loss=[2310x$0.01521)-$1000]/$1000
2. SP=$0.02
A=$20 or 98% loss
B=$46.2 or 95% loss
3. SP=$0.03
A=$30 or 97% loss
B=$69.3 or 93% loss
4. SP=$0.05
A=$50, or 95% loss
B$115.5 or 88% loss
5. SP=$0.10
A=$100 or 90% loss
B=$231 or 77% loss I think that it is clear that by buying the rights offer (w/o putting in new money and at the least amount=x6.7), the two senarios show clearly different outcomes.
It's my opinon that money LESS lost is a good thing, regarless how one feels about the company.
The only situation that these two senarios have the same outcome is if the SP goes to zero (100% loss) in the near future, which imo, is highly unlikely. GLTA longs!