Rangers issue 14 million shares for 25pence each

Big Joke New said:
It doesn't dilute anything. An issue of shares at the correct value does not affect the value of any individual share. It will result in you (a person not taking new shares in the issue) having a smaller % holding of the total, but the value of the company in total increases in proportion to the increase in shares.

Example:

There are 10 shares in a company valued at £1 each. Total company assets are £10 in the bank. If you own 2 shares you have 20% of the company and a value of 2 x £1 = £2

The company issues another 5 shares to an individual (not you) at a price of £1 each

There are now 15 shares in the company. But there is also now £15 in the bank.

Your shareholding is now only 2/15 = 13.3% but the shares are still worth £1 each because there is £15 in the bank divided by 15 shares. So your 2 shares are worth 2 x £1 = £2 still. You have not lost any value.

All that's happened is more shares of a bigger pie

It's a slightly different calculation with loan conversion to equity but it amounts to exactly the same thing.

The only time you would suffer a "dilution" would be if the new shares were issued at less than their actual value (say 20p if we agree that 25p is the correct value). That is where the individuals buying the new shares would benefit at your expense.

IMO this is why shares were issued at 20p earlier to repay some loans - effectively giving them an interest payment for the risk capital they had put in. And not unreasonable to my mind.

Hope this helps some non-financial bears out there
Click to expand...
Get you Charles Green :)
 
Gio#56 said:
many thanks, is the value of the company actually really rising? Or is the addition of more shares just more slices given of the companys worth?

If a companys real value is £100 and there is 100 shares at £1 each.

You have £10 worth of shares, ie 10%, The company offers a further £20 shares at £1 which you dont buy yourself.

The company is now valued at £120, you invested £10 and you now own 8.3%.

This as you say is actually true.

But in real terms, in my view. The company is only worth what its worth. More shares does not increase the companys worth, just gives more slices of the same pie. ie share value is now fallen from £1 to 83p, so your £10 is now in fact £8.30 if the companys value have not in fact risen.
Click to expand...
No sorry mate, you're a bit confused here. If the shares are issued for fresh cash then of course the value of the company increases. That cash goes into the company's bank account. The company is worth more now because it has more assets (i.e. a bigger bank balance). Your share is smaller but it's a smaller share of a bigger pie. Your personal value has not risen but the company's has.

Extreme example:

Company has 1 share issued. And £1 in the bank.

Total company value = £1. Value per share = £1.

It then issues 999,999 shares at £1 each and banks the cash

Now it has 1 million shares and £1 million in the bank

Total company value = £1 million. Value per share = £1 still.

The company value increases, the individual value per share doesn't
 
Big Joke New said:
No sorry mate, you're a bit confused here. If the shares are issued for fresh cash then of course the value of the company increases. That cash goes into the company's bank account. The company is worth more now because it has more assets (i.e. a bigger bank balance). Your share is smaller but it's a smaller share of a bigger pie. Your personal value has not risen but the company's has.

Extreme example:

Company has 1 share issued. And £1 in the bank.

Total company value = £1. Value per share = £1.

It then issues 999,999 shares at £1 each and banks the cash

Now it has 1 million shares and £1 million in the bank

Total company value = £1 million. Value per share = £1 still.

The company value increases, the individual value per share doesn't
Click to expand...
I get that and agree, but the TRUE value is only worth what the pies (ha ha) is worth. No matter what the shares dictate.

In simple terms, DK will find it much harder to sell at 20p per share if the shares are forever increasing.
 
Another 400k of shares issued today at 25p.

Looks like from the 14m issued the other day Borita Investments Limited share holdings have went up.

Perron Investments shareholding’s has increased too.

Also John Bennett and George Letham shareholding’s have increased.
 
Last edited:
Of the £3.5m generated in the most recent share issue, it breaks down as follows:

£1m - Julian Wolhardt (via Borita Investments)
£1m - John Halsted (via Perron Investments)
£1m - George Letham
£0.5m - John Bennett

The £100k of shares that was mentioned in the subsequent filing does not appear to have gone to one of the major shareholders. Pure speculation on my part, but perhaps it has gone to someone like Robertson and/or Bisgrove?
 
New York Bear said:
Of the £3.5m generated in the most recent share issue, it breaks down as follows:

£1m - Julian Wolhardt (via Borita Investments)
£1m - John Halsted (via Perron Investments)
£1m - George Letham
£0.5m - John Bennett

The £100k of shares that was mentioned in the subsequent filing does not appear to have gone to one of the major shareholders. Pure speculation on my part, but perhaps it has gone to someone like Robertson and/or Bisgrove?
Click to expand...
Cheers mate, I was to lazy to work out the amounts.

Fantastic from all of the investors continuing to put money in.

John Halsted is a very interesting one.
 
You must log in or register to reply here.

Share this page

Latest posts

Back
Top