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A concern on KCB Rights Issue

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2012		#1 Posted : Monday, June 21, 2010 10:51:04 AM
Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi		What happens if the share price falls below the rights' offer price within the issue period? BBI will solve it :)
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the deal		#2 Posted : Monday, June 21, 2010 11:14:21 AM
Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery		Evolve wrote: @the deal, If KCB trades below the rights offer price, then you can let the rights lapse and purchase the shares from the market as long as the price level covers the transaction costs. If this happens, you can bet the issue will have no takers and it will be a waterloo for KCB.
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guru267		#3 Posted : Monday, June 21, 2010 12:18:35 PM
Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi		this stock is a screaming sell because there is no possibility of captital gains for the next two years... though i'm confident even with the dilution they will still pay a 1bob dividend and at current prices this represents a good dividend yield to wait it out Mark 12:29 Deuteronomy 4:16
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VituVingiSana		#4 Posted : Monday, June 21, 2010 12:31:22 PM
Rank: Chief Joined: 1/3/2007 Posts: 18,349 Location: Nairobi		2012 wrote: What happens if the share price falls below the rights' offer price within the issue period? It happened for EABL many years ago... so the 'underwriter' (not really but Diageo backstopped it) bought all the unallocated shares... and NEVER looked back... What Diageo bought (I think it was at 52/-) is now 20x... coz of bonuses, splits... I am NOT saying u buy the Rights but do what @the deal suggests... if u like KCB Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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2012		#5 Posted : Monday, June 21, 2010 12:38:30 PM
Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi		I hear you all, but I guess what I'm asking indirectly is; isn't this equivalent to a vote of no confidence in the management of KCB? What will this mean for KCB if they don't manage to get the 15B? BBI will solve it :)
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Wa_ithaka		#6 Posted : Monday, June 21, 2010 12:45:34 PM
Rank: Veteran Joined: 1/7/2010 Posts: 1,279 Location: nbi		2012-apologies in advance for your hurt feelings, but if you are a current KCB shareholder and you are asking what does it mean if shareholders refuse the rights, I guess you shouldn't have bought the KCB shares (or any other shares for the matter). The Governor of Nyeri - 2017
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MaichBlack		#7 Posted : Monday, June 21, 2010 12:57:47 PM
Rank: Elder Joined: 7/22/2009 Posts: 7,840		KCB might hit 17/= by friday 25th June. If that happens, then this rights issue is doomed. Another major thing that will happen at that point is that investor confidence on this share will go to it's lowest ebb in a long long time. And the share price will plummet even further!!! This is a blood bath!!! @ vvs et-al - Buying when there is blood on the streets always promises a handsome return. How much blood should we let flow before we get in?? I should get some of these shares for my daughter - she's a long term investor (although she doesn't know it yet - LOL)! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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The Merchant		#8 Posted : Monday, June 21, 2010 1:02:34 PM
Rank: Veteran Joined: 5/24/2010 Posts: 846 Location: KENYA		Sold mine very quickly. I am not that confident in KCB's management anymore. There are many other better picks in the market right now. @GURU, You have good reasons for waiting it out, you a truly an investor who sticks to his strategy. Others would do well to follow your ideals.
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Obi 1 Kanobi		#9 Posted : Monday, June 21, 2010 1:16:23 PM
Rank: Elder Joined: 7/23/2008 Posts: 3,017		I was trying to be a smart alec, wait for my rights to accrue then exit today, but with the current price, i don't know if I made the right decision. This share has singly screwed all my portfolio gains. I should have ...... "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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VituVingiSana		#10 Posted : Monday, June 21, 2010 1:32:49 PM
Rank: Chief Joined: 1/3/2007 Posts: 18,349 Location: Nairobi		MaichBlack wrote: @ vvs et-al - Buying when there is blood on the streets always promises a handsome return. How much blood should we let flow before we get in?? I should get some of these shares for my daughter - she's a long term investor (although she doesn't know it yet - LOL)! Your daughter should be PROUD of you! Anyway, IMHO... if the price falls significantly below 17/-... then buy them up coz I think they will edge back up... I have my own theory on this! So give up the Rights (I have decided not to exercise my Rights) but buy from the market if they fall at 16.50 (cover commission costs)... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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