rights issue - choices

  1. 3,062 Posts.
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    To fellow Swiftel shareholders - you will by now have received the Offer and Acceptance forms for the Swiftel issue at 2c.

    I'm no investment advisor and you should seek professional help in assessing whether or not to take up your entitlement, but I offer my own thoughts for consideration.

    I will be taking up my full entitlement. The company continues to prosper despite uncertain times. The Sydney roll out appears to have gone well, building on the already successful Perth operation. Melbourne is next. The company will have about 128m shares on issue after the issue. At today's price of 3c, that gives a market cap. of just 3.84m. (I'll iterate, that's AFTER the issue!)

    The choice facing shareholders is whether to take up the rights or let them lapse. If, like me, you can afford to take them up, then I clearly think that is the best option.

    However, there is a way to 'hedge your bets' by selling some of your existing shares to match your entitlement. If you do this today you will realise 3c for something you can replace at 2c. Understand that I am not advocating this course necessarily. In the event you sell, you may well be doing so to me.

    It is just that instead of simply throwing your entitlement into the wastepaper bin, thereby passing your rights on to the underwriters, there is this alternative to consider.
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