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The Bull has Arrived
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Aguytrying
#381 Posted : Wednesday, January 19, 2011 6:18:37 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
alikujia wrote:
@Aguy,
I think bonussses do not necessarily increase intrinsic share value, infact it should have zero effect on immediate value. but yes, psychologically it can cause some misguided interpretation and affect share price value.

i meant the entity that got 200k shares, if there's a bonus of 1:4. They sell the new shares how much is that in cash! Even if the price stays where it is. 50K bonus share multiplied by 150 bob. Thats a cool 7.5m.
The investor's chief problem - and even his worst enemy - is likely to be himself
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moneydust
#382 Posted : Wednesday, January 19, 2011 6:55:57 PM
Rank: Member

Joined: 1/31/2007
Posts: 304
Aguytrying wrote:
alikujia wrote:
@Aguy,
I think bonussses do not necessarily increase intrinsic share value, infact it should have zero effect on immediate value. but yes, psychologically it can cause some misguided interpretation and affect share price value.

i meant the entity that got 200k shares, if there's a bonus of 1:4. They sell the new shares how much is that in cash! Even if the price stays where it is. 50K bonus share multiplied by 150 bob. Thats a cool 7.5m.




The market price of the shares at the time of the bonus will come down by a factor of the bonus issue once the share start selling ex bonus
Ideally a bonus issue does not change a companys valuation..
Therefore that profit of 7.5M can only be a mirage in the immediate aftermath of a bonus issue
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youcan'tstopusnow
#383 Posted : Wednesday, January 19, 2011 9:00:15 PM
Rank: Chief

Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
moneydust, I was looking at Centum on the Wazua NSE Performance Calculator. It issued bonus shares last year. When they started trading, the prices didn't move too much. In fact, it was fairly stable. I think a drop in share prices after a bonus issue will depend on if demand will continue to be sustained as a result of the improving fortunes of a business. It is not a given that the price will drop by a factor of the bonus
GOD BLESS YOUR LIFE
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moneydust
#384 Posted : Thursday, January 20, 2011 9:48:49 AM
Rank: Member

Joined: 1/31/2007
Posts: 304
youcan'tstopusnow wrote:
moneydust, I was looking at Centum on the Wazua NSE Performance Calculator. It issued bonus shares last year. When they started trading, the prices didn't move too much. In fact, it was fairly stable. I think a drop in share prices after a bonus issue will depend on if demand will continue to be sustained as a result of the improving fortunes of a business. It is not a given that the price will drop by a factor of the bonus


I agree...in centum, though the price dropped slightly after the share went ex bonus..the bonus shares issued were few and coupled with the increased demand resulted in the share surpassing its pre bonus price..
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mlennyma
#385 Posted : Thursday, January 20, 2011 9:55:33 AM
Rank: Elder

Joined: 7/21/2010
Posts: 6,194
Location: nairobi
And thats why what i got from centum as bonus is worth more than if they declared a dividend.am waiting for more mpaka 2014
"Don't let the fear of losing be greater than the excitement of winning."
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winston
#386 Posted : Thursday, January 20, 2011 3:50:22 PM
Rank: Member

Joined: 4/14/2010
Posts: 806
Location: Nairobi
mlennyma wrote:
And thats why what i got from centum as bonus is worth more than if they declared a dividend.am waiting for more mpaka 2014


Niko na wewe!
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ProverB
#387 Posted : Monday, March 28, 2011 10:47:28 AM
Rank: Veteran

Joined: 3/12/2010
Posts: 1,199
Location: Eastlander
Reads like a novel..with fictitious characters! Humbling this thread is. smile
..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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QW25071985
#388 Posted : Monday, March 28, 2011 10:55:55 AM
Rank: Veteran

Joined: 3/25/2011
Posts: 946
@ proverb. If you think you can spot accuratly bulls and bear market ,our local n.s.e is to small for you. You can try the nasdaq ,n.y.s.e
not only that start ur own brokerage firm and we'll come flockin there.
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ProverB
#389 Posted : Monday, March 28, 2011 11:07:55 AM
Rank: Veteran

Joined: 3/12/2010
Posts: 1,199
Location: Eastlander
QW25071985 wrote:
@ proverb. If you think you can spot accuratly bulls and bear market ,our local n.s.e is to small for you. You can try the nasdaq ,n.y.s.e
not only that start ur own brokerage firm and we'll come flockin there.

smile AAAwwwwwawwwww!! so sweeet! Thanx. smile Laughing out loudly
..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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mkonomtupu
#390 Posted : Monday, March 28, 2011 11:14:04 AM
Rank: Veteran

Joined: 2/10/2010
Posts: 1,001
Location: River Road
What interesting reading. Wazua does get mad at times it feels like reading the south sea bubble burst. I must nominate the best from the posts in order of merit ProverB, Pkoli, erifloss, vvs
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