National Grid Rights Issue

[dealtn]

Why would you choose to let anyone decide the price you sell something you don't want for? Does anyone do the same for assets they purchase/

Seems an odd strategy to me. You had the choice (at all times) during the rights period to sell at a known price, or to take them up. If the price wasn't attractive enough to take up and the cash price realisable was in excess of the value you placed on it then selling in the market makes sense. Else you are open to sellers regret.

[kempiejon]

Why would you choose to let anyone decide the price you sell something you don't want for? Does anyone do the same for assets they purchase/

Seems an odd strategy to me. You had the choice (at all times) during the rights period to sell at a known price, or to take them up. If the price wasn't attractive enough to take up and the cash price realisable was in excess of the value you placed on it then selling in the market makes sense. Else you are open to sellers regret.

I do that on most of my purchases, Since 2005 I have monthly purchases set up with my accounts. I do usually hand sell though have used limit orders.
I'd nit checking my portfolio regularly and weeks can go past without my interfering. My rights lapsed as I wasn't paying enough attention to the choices and deadline.
Not sure I recognise sellers regret. Opps I shouldn't have sold that sort of thoughts?

[dealtn]

Not sure I recognise sellers regret. Opps I shouldn't have sold that sort of thoughts?

Oops I sold something I didn't want at 190p when I had the choice to sell it at 250p.

[IanTHughes]

Not sure I recognise sellers regret. Opps I shouldn't have sold that sort of thoughts?

Oops I sold something I didn't want at 190p when I had the choice to sell it at 250p.

When will you get that crystal ball fixed? It must be so daunting to have to make decisions without already knowing what the future will bring!

I take my hat off to you but next time you really should ask for guidance from one of the many Mystic Megs that post on here!

Enjoy!


Ian.

[dealtn]

Oops I sold something I didn't want at 190p when I had the choice to sell it at 250p.

When will you get that crystal ball fixed? It must be so daunting to have to make decisions without already knowing what the future will bring!

I take my hat off to you but next time you really should ask for guidance from one of the many Mystic Megs that post on here!

Enjoy!


Ian.

Er you don't need a crystal ball to know the current price. A decision had already been made not to keep the asset. Prices available all the time to turn that unwanted asset into cash (preferred to the asset). No action taken then discussion about the poor price achieved.

This isn't about achieving the maximum price but deciding to act.

Keep your hat on your head and actually read what was written.

[IanTHughes]

Why would you choose to let anyone decide the price you sell something you don't want for? Does anyone do the same for assets they purchase.

Speaking for nyself, almost all of my purchases are made by my broker with what is called "at best", usually ordered at the close of business the day before. Of course, unlike all the traders posting on these boards - the brokers' bonus providers - I am not fooled into thinking that I am a wonder trader! In the real world one cannot rely on hindsight!

Seems an odd strategy to me. You had the choice (at all times) during the rights period to sell at a known price, or to take them up. If the price wasn't attractive enough to take up and the cash price realisable was in excess of the value you placed on it then selling in the market makes sense. Else you are open to sellers regret.

Absolutely! One could have chosen to "sell" the rights at a price of £1.55, rather than merely accepting a "Lapse" price £1.90. You would have missed 20% of what could have been achieved, but you would have the comfort of "being in control". Priceless!

Enjoy!


Ian.

[dealtn]

Seems an odd strategy to me. You had the choice (at all times) during the rights period to sell at a known price, or to take them up. If the price wasn't attractive enough to take up and the cash price realisable was in excess of the value you placed on it then selling in the market makes sense. Else you are open to sellers regret.

Absolutely! One could have chosen to "sell" the rights at a price of £1.55, rather than merely accepting a "Lapse" price £1.90. You would have missed 20% of what could have been achieved, but you would have the comfort of "being in control". Priceless!

Enjoy!


Ian.

Yes, but you still achieved a price acceptable to you. None of us know the future. But have the opportunity to sell (and buy) at prices we are happy with.

If you have decided you don't want something and want to sell it, and have a known acceptable price, that is enough. Waiting to see if a better, or worse, outcome arrives, doesn't help.

[IanTHughes]

When will you get that crystal ball fixed? It must be so daunting to have to make decisions without already knowing what the future will bring!

I take my hat off to you but next time you really should ask for guidance from one of the many Mystic Megs that post on here!

Er you don't need a crystal ball to know the current price. A decision had already been made not to keep the asset. Prices available all the time to turn that unwanted asset into cash (preferred to the asset). No action taken then discussion about the poor price achieved.

Anyone asserting that "Selling Rights" always results in a higher price than achieved with "Lapsed Rights" is certainly claiming some sort of knowledge of future events!

This isn't about achieving the maximum price but deciding to act.

My point is the difference between that (call it 220p after the 645p is taken off) and the 190p - 14% or more below. That's considerably more than sales transaction for any notable amount. If that's a typical cost for lapsed rights, it's worth avoiding.

Keep your hat on your head and actually read what was written.

If only you would!

Enjoy!


Ian.

[dealtn]

Er you don't need a crystal ball to know the current price. A decision had already been made not to keep the asset. Prices available all the time to turn that unwanted asset into cash (preferred to the asset). No action taken then discussion about the poor price achieved.

Anyone asserting that "Selling Rights" always results in a higher price than achieved with "Lapsed Rights" is certainly claiming some sort of knowledge of future events!

Are you claiming I, or anyone else has, said that?

[IanTHughes]

Absolutely! One could have chosen to "sell" the rights at a price of £1.55, rather than merely accepting a "Lapse" price £1.90. You would have missed 20% of what could have been achieved, but you would have the comfort of "being in control". Priceless!

Yes, but you still achieved a price acceptable to you. None of us know the future. But have the opportunity to sell (and buy) at prices we are happy with.

If you have decided you don't want something and want to sell it, and have a known acceptable price, that is enough. Waiting to see if a better, or worse, outcome arrives, doesn't help.

You agree with me ... excellent!

Enjoy!


Ian.

[dealtn]

Yes, but you still achieved a price acceptable to you. None of us know the future. But have the opportunity to sell (and buy) at prices we are happy with.

If you have decided you don't want something and want to sell it, and have a known acceptable price, that is enough. Waiting to see if a better, or worse, outcome arrives, doesn't help.

You agree with me ... excellent!

Enjoy!


Ian.

Yes we agree. No need for a crystal ball, unlike your original claim.

[EthicsGradient]

Why would you choose to let anyone decide the price you sell something you don't want for? Does anyone do the same for assets they purchase/

Seems an odd strategy to me. You had the choice (at all times) during the rights period to sell at a known price, or to take them up. If the price wasn't attractive enough to take up and the cash price realisable was in excess of the value you placed on it then selling in the market makes sense. Else you are open to sellers regret.

Because if you only had a few rights, you might think that the dealing charges for selling your few rights immediately would be more than the collective fees charged for selling many people's lapsed rights.

eg Your broker has a minimum £10 charge, and you have 20 nil-paid rights. You will pay 50p per right if you sell in the market.

Now, my point (and perhaps others) was that we had no indication of how much the effective charge was going to be on the rights - it turned out to be 30p or more. I would have thought it ought to be under 10p - the price by the time the rights lapsed wasn't that volatile, and I think the underwriters (and maybe the market-makers) have made a tidy profit with very little risk or effort at the expense of the lapsed rights holders. But if that is the kind of outcome for lapsed rights, then it's good to know for the future.

[IanTHughes]

You agree with me ... excellent!

Yes we agree. No need for a crystal ball, unlike your original claim.

Anyone asserting that "Selling Rights" always results in a higher price than achieved with "Lapsed Rights" is certainly claiming some sort of knowledge of future events!

Enjoy!


Ian.

[dealtn]

Yes we agree. No need for a crystal ball, unlike your original claim.

Anyone asserting that "Selling Rights" always results in a higher price than achieved with "Lapsed Rights" is certainly claiming some sort of knowledge of future events!

Enjoy!


Ian.

And as already requested, please point me to that claim, made either by myself or someone else.

[IanTHughes]

Why would you choose to let anyone decide the price you sell something you don't want for? Does anyone do the same for assets they purchase/

Seems an odd strategy to me. You had the choice (at all times) during the rights period to sell at a known price, or to take them up. If the price wasn't attractive enough to take up and the cash price realisable was in excess of the value you placed on it then selling in the market makes sense. Else you are open to sellers regret.

Because if you only had a few rights, you might think that the dealing charges for selling your few rights immediately would be more than the collective fees charged for selling many people's lapsed rights.

eg Your broker has a minimum £10 charge, and you have 20 nil-paid rights. You will pay 50p per right if you sell in the market.

Now, my point (and perhaps others) was that we had no indication of how much the effective charge was going to be on the rights - it turned out to be 30p or more. I would have thought it ought to be under 10p - the price by the time the rights lapsed wasn't that volatile, and I think the underwriters (and maybe the market-makers) have made a tidy profit with very little risk or effort at the expense of the lapsed rights holders. But if that is the kind of outcome for lapsed rights, then it's good to know for the future.

Here are the closing prices for both National Grid PLC (NG) and the NG Nil Paid Rights (NGPN), from the Announcement Date, up to the day before the rights “lapsed”.

Date      | NG Price | Nil Paid Price | Total    
24-May-24 |  889.40  |        200.00  | 1,089.40 
28-May-24 |  876.60  |        189.15  | 1,065.75 
29-May-24 |  838.40  |        150.45  |   988.85 
30-May-24 |  843.00  |        155.00  |   998.00 
31-May-24 |  886.00  |        200.00  | 1,086.00 
03-Jun-24 |  886.00  |        200.00  | 1,086.00 
04-Jun-24 |  911.80  |        229.80  | 1,141.60 
05-Jun-24 |  901.60  |        214.60  | 1,116.20 
06-Jun-24 |  864.00  |        216.10  | 1,080.10 
07-Jun-24 |  869.20  |        224.00  | 1,093.20

What would be the “correct” price for the "Lapsed" rights?

The answer of course, is whatever the market will bear!

Part of the problem is the huge sell order this will be generated to cover all of those “Lapsed” rights. NG have stated that, including the fractional entitlement not available for sale, just over 9 Million rights were not exercised, requiring in excess of £58.61 Million be found by the market, just to cover the Exercise price. A “Lapsed” right price of £1.90 adds a further £17.26 Million, making a total in excess of £75 Million.

You cannot demand that a minimum price be set, that is not how a “market” works.

Enjoy!


Ian.

[IanTHughes]

Anyone asserting that "Selling Rights" always results in a higher price than achieved with "Lapsed Rights" is certainly claiming some sort of knowledge of future events!

And as already requested, please point me to that claim, made either by myself or someone else.

Already done.

Enjoy!


Iasn

[dealtn]

And as already requested, please point me to that claim, made either by myself or someone else.

Already done.

Enjoy!


Iasn

Indulge me. I can't find it, but I admit I am far from perfect. Enjoy your debating victory.

[EthicsGradient]

Because if you only had a few rights, you might think that the dealing charges for selling your few rights immediately would be more than the collective fees charged for selling many people's lapsed rights.

eg Your broker has a minimum £10 charge, and you have 20 nil-paid rights. You will pay 50p per right if you sell in the market.

Now, my point (and perhaps others) was that we had no indication of how much the effective charge was going to be on the rights - it turned out to be 30p or more. I would have thought it ought to be under 10p - the price by the time the rights lapsed wasn't that volatile, and I think the underwriters (and maybe the market-makers) have made a tidy profit with very little risk or effort at the expense of the lapsed rights holders. But if that is the kind of outcome for lapsed rights, then it's good to know for the future.

Here are the closing prices for both National Grid PLC (NG) and the NG Nil Paid Rights (NGPN), from the Announcement Date, up to the day before the rights “lapsed”.

Date      | NG Price | Nil Paid Price | Total    
24-May-24 |  889.40  |        200.00  | 1,089.40 
28-May-24 |  876.60  |        189.15  | 1,065.75 
29-May-24 |  838.40  |        150.45  |   988.85 
30-May-24 |  843.00  |        155.00  |   998.00 
31-May-24 |  886.00  |        200.00  | 1,086.00 
03-Jun-24 |  886.00  |        200.00  | 1,086.00 
04-Jun-24 |  911.80  |        229.80  | 1,141.60 
05-Jun-24 |  901.60  |        214.60  | 1,116.20 
06-Jun-24 |  864.00  |        216.10  | 1,080.10 
07-Jun-24 |  869.20  |        224.00  | 1,093.20

What would be the “correct” price for the "Lapsed" rights?

The answer of course, is whatever the market will bear!

Part of the problem is the huge sell order this will be generated to cover all of those “Lapsed” rights. NG have stated that, including the fractional entitlement not available for sale, just over 9 Million rights were not exercised, requiring in excess of £58.61 Million be found by the market, just to cover the Exercise price. A “Lapsed” right price of £1.90 adds a further £17.26 Million, making a total in excess of £75 Million.

You cannot demand that a minimum price be set, that is not how a “market” works.

Enjoy!


Ian.

The deadline for the decision to take up the rights was June 10th. So the "correct" price was from then onwards, when they knew how many shares needed to be sold, and they could start selling them. Which is when the full market price was 865p and above, so the price minus 645p was 220p and above.

[IanTHughes]

Here are the closing prices for both National Grid PLC (NG) and the NG Nil Paid Rights (NGPN), from the Announcement Date, up to the day before the rights “lapsed”.

Date      | NG Price | Nil Paid Price | Total    
24-May-24 |  889.40  |        200.00  | 1,089.40 
28-May-24 |  876.60  |        189.15  | 1,065.75 
29-May-24 |  838.40  |        150.45  |   988.85 
30-May-24 |  843.00  |        155.00  |   998.00 
31-May-24 |  886.00  |        200.00  | 1,086.00 
03-Jun-24 |  886.00  |        200.00  | 1,086.00 
04-Jun-24 |  911.80  |        229.80  | 1,141.60 
05-Jun-24 |  901.60  |        214.60  | 1,116.20 
06-Jun-24 |  864.00  |        216.10  | 1,080.10 
07-Jun-24 |  869.20  |        224.00  | 1,093.20

What would be the “correct” price for the "Lapsed" rights?

The answer of course, is whatever the market will bear!

Part of the problem is the huge sell order this will be generated to cover all of those “Lapsed” rights. NG have stated that, including the fractional entitlement not available for sale, just over 9 Million rights were not exercised, requiring in excess of £58.61 Million be found by the market, just to cover the Exercise price. A “Lapsed” right price of £1.90 adds a further £17.26 Million, making a total in excess of £75 Million.

You cannot demand that a minimum price be set, that is not how a “market” works.

The deadline for the decision to take up the rights was June 10th. So the "correct" price was from then onwards, when they knew how many shares needed to be sold, and they could start selling them. Which is when the full market price was 865p and above, so the price minus 645p was 220p and above.

Well it appears that when they started selling them, the price had dropped. Equity markets are not like supermarkets! When you decide you want to sell, you can only do so at a price that a buyer is prepared to accept.

You would appear to be suggesting that an underwriter must accept that, even if unable to achieve in the market what is by definition an historical price, that price has already been fixed in stone, and must be honoured. Should this straight jacket apply to all equity sales, or is it only "Lapsed" rights that should receive this special attention?

I say again, that is not how a “market” works.

Enjoy!


Ian.

[EthicsGradient]

The deadline for the decision to take up the rights was June 10th. So the "correct" price was from then onwards, when they knew how many shares needed to be sold, and they could start selling them. Which is when the full market price was 865p and above, so the price minus 645p was 220p and above.

Well it appears that when they started selling them, the price had dropped. Equity markets are not like supermarkets! When you decide you want to sell, you can only do so at a price that a buyer is prepared to accept.

You would appear to be suggesting that an underwriter must accept that, even if unable to achieve in the market what is by definition an historical price, that price has already been fixed in stone, and must be honoured. Should this straight jacket apply to all equity sales, or is it only "Lapsed" rights that should receive this special attention?

I say again, that is not how a “market” works.

Enjoy!


Ian.

Your "historical price" seems irrelevant. There was nothing in the documents saying "we will start selling lapsed rights 2 weeks before they lapse". It seems illogical to expect them to do that - because they'd have no idea of how many they should sell. Indeed, it seems to be you who is suggesting that a price was 'fixed in stone' over those 2 weeks, and that the premium should be based on that, rather than on the market price when the lapsed rights were actually available for sale.