The LONMIN share price thread

DrewChan said:
The consolidation makes this kind of pointless imo unless you have a LOT of shares,

Lets say you have 10 000 shares, this is consolidated at 16c into R16, with a new amount of 100 shares, (R1600),

From here lonmin makes a mystical recovery and the share price becomes R50, you have made R3400,

The gains just aren't that great
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Calculated on shares purchased at 34c per share(going back in this thread this is what most people paid for shares)

Share value at 16c
10000 * 16c = R1600

Shares after consolidation
10000 / 100 = 100(no of shares)
16c * 100 = R16(value of 1 share)

Share value after consolidation
100 * R16 = R1600

Now if that share turns to R50
100 * R50 = R5000

That is a R3400 profit on top of the R3400 you have spent to buy 10000 shares at 34c a share.
Thats a 100% profit if I use your amounts.
Percentage wise, thats a great gain!!

ps. I do doubt that the share will reach R50. But we can only hope hey...
 
Last edited:
OOPS!!!!

Lonmin rights issue: A damning verdict Outstanding 7.84 billion shares have not been taken up.
Warren Dick | 11 December 2015 12:27

Platinum miner Lonmin announced Thursday December 10 that 70.93% of shareholders had followed their rights. This represented a subscription for 19.15 billion shares pursuant to the rights offer announced on November 9.

The outstanding 7.84 billion shares have not been taken up and it now falls on HSBC, JP Morgan and Standard Bank (collectively the underwriters and creditors of the company) to procure subscribers.

If new subscribers cannot be procured, the three banks will be forced to take up the outstanding amount. This means the three banks could be on the hook for R1.56 billion.

We must also bear in mind that the Public Investment Corporation (PIC) undertook to follow rights on its 7% shareholding plus undertaking to underwrite a further 25% (taking its entire subscription to 32% of the rights offer). So if we subtract that 25% the PIC extended above and beyond its own shareholding – which we think were done for reasons other than for commercial returns – it would indicate that only 46% (71 -25) of shareholders followed their rights. Or, if we invert things, 54% of shareholders did not follow their rights and have effectively written off their investment. This is because the level of dilution incurred by shareholders not following their rights dilutes their investment into oblivion.

That is a damning verdict on the state of the company.

http://www.mineweb.com/news/platinu...ights-issue-a-damning-verdict/?v=7516fd43adaa
 
terencej said:
ps. I do doubt that the share will reach R50. But we can only hope hey...
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Thanks for writing that all out :)

Yeah it is a significant gain however its based on a huge if, I was hoping for an increase in share price without a consolidation, which would have made us all millionaires
 
DrewChan said:
Thanks for writing that all out :)

Yeah it is a significant gain however its based on a huge if, I was hoping for an increase in share price without a consolidation, which would have made us all millionaires
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If the share goes from 10c to 50c it is the exact same as it going from R10 to R50. . .

You can see that right?
 
Drifter said:
The outstanding 7.84 billion shares have not been taken up and it now falls on HSBC, JP Morgan and Standard Bank (collectively the underwriters and creditors of the company) to procure subscribers.

If new subscribers cannot be procured, the three banks will be forced to take up the outstanding amount. This means the three banks could be on the hook for R1.56 billion.
Click to expand...


Would this mean that R1.56 billion worth of shares will be owned by the 3 banks?
 
Towards the end of the day, though, Lonmin announced that the banks underwriting the deal had managed to sell all but 1m of the new shares (3.82%), the so-called rump.
 
Thor187 said:
I'll need to buy more

http://finance.yahoo.com/news/lonmins-crucial-400-million-rights-104751786.html
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This article just confirms my view. Lonmin is falling and there is no stopping it. Even with the rights offer, the company will remain in operation for another 1-2 years, if that long, after which it will eventually crash and burn. There is no investor confidence in Lonmin, and with that the demand in the shares will drop.

After the consolidation, with so little demand, the share price will quickly dip from R21 to R18, R15, R10, to R5 and then back to the cents. But, I am also sure that if the share price dips below R15, the company will suspend trading and delist.

Unfortunately, there is just too much external factors going against Lonmin to survive this ordeal.

Besides, on the other hand, with Lonmin coming down crashing, may actually be a very good thing for the markets. But, that is a story for another time.
 
Bundu said:
why would that happen?
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It happens with each and every consolidation in any market. Go do some reading on consolidations that occurred before. It is 100% natural for the price to fall straight after consolidation. How far, though, is the big question.

If the company is strong, with good management, in demand by investors, etc., then after the fall, the price will increase again - something I do not see in Lonmin.
 
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