RE:RE:RE:RE:RE:RE:RE:RE:Trading Haltedparacelcius wrote: on the quadravest website the net asset value of the share is $16.60, if I don't sell my shares you are telling me that they are worth $0 I must not understand your explanation which seems very clear though!!! Just for you though it's the first time I'm confronted with this kind of offer I didn't buy this kind of stock before, so if you could be more precise in your explanation it would be easier to understand .
The net asset value you see on the Quadrevest website is the net asset value for ONE UNIT. A unit consists of one common share ( Class A = FFN ) PLUS one preferred share (FFN.PR). The preferred share always has a nominal value of $10.00. That leaves $16.60-$10.00=$6.60 as the net asset value of your common share. The difference between $6.60 and todays trading price of $7.71 is called the PREMIUM. People really want to own these shares because they want a nice dividend, so they are willing to pay a PREMIUM.
But now, the company is offering common shares at a fixed price of $7.40. Typically when this happens, the share price and the PREMIUM people are willing to pay drops. Usually the drop is at least (or frequently below) the offer price of $7.40. Usually after a while (after all the new shares are absorbed by the marketplace) the price will slowly rise again to some sort of prmium. The RISK is that while we are waiting, the stock market has a correction and the net asset value of the units drops from $16.60 to $15.60 or maybe $15.00 - we don't know.