Bank of Ireland Rights Issue #2

Comordha

Just wanted to get a general feel on who intends taking up their rights. Think I'll be passing.

Is there anyway to setup a poll on Boards?

pgav19

What are the options if you pass on the rights issue? Can we sell the option.

Am i right in saying they are offering 18 for 5 at 10c.....how does this work if the current share price is 9c

Will they have to lower the offer price to ensure a discount to the share price is in place

Tin Foil Hat

I won't be. It would cost me around €7600 to take up my full rights and I just don't have it.
It's a shame really. It would bring my average down to around 22-23c which would probably mean breaking even within a year.
At my current average of 69c they are going in the bottom drawer for a decade or so.

pgav19

Option are currently selling at .1c (i.e difference between share price and offer price) So unless share price rises no point in selling.

I think i will take up the offer, it will bring my average down to 17c. As Tin Foil Hat said hopefully it will be at above the 20c mark within a year

J. Kwok

Any analyst estimates of BOI? What is the P/E ratio of 2011 and 2012?

martyoo

What is the P/E ratio of 2011 and 2012?

N/A & N/A

Comordha

€0.20 cent a share is far out, even with the current number of shares in issue that would value the company at close to €5 billion or close to 1/4 of its peak worth in early 2007. After all the new shares are issued the number of shares in issue could be in excess of 40 billion or 40 times the amount in issue in early 2007. This is where the problem lies. It will take a very very long time to remove these shares form issue, either through buy-back and removal or conversion into treasury stock.

These valuations don't even take into account the non-property risks the bank is exposed to, including several billions in potentially toxic sovereign debt.

I might partake for the craic though.

neris

pgav19 wrote: »

Option are currently As Tin Foil Hat said hopefully it will be at above the 20c mark within a year

Big ask for it to rise 100% in the next year. Its possible but take some great news and earnings

pgav19

You would imagine the market has priced in the rights issue...hence why the share price is matching the issue price.

With 19 billion new shares issued that brings us up to somewhere in the region of 24 billion shares (i could be mistaken here).

24 x .1 = 2.4 billion

To double that to 4.8 billion is very optimistic. If there is no new capital requirements is this doable is the question

treatyman

I took a gamble a few weeks ago and spent a 2k at 0.14c through Computershare sharedealing... Do I have an rights issue option? If so how do I go about it?

Apologies for being a complete numbnut on this.

pgav19

treatyman wrote: »

I took a gamble a few weeks ago and spent a 2k at 0.14c through Computershare sharedealing... Do I have an rights issue option? If so how do I go about it?

Apologies for being a complete numbnut on this.

Yes you do have a rights option. You're broker will more than likely be sending you a letter in the next couple of days advising you of the options available to you. i.e.

A: Take up all of your Rights
B: Take up some of your Rights through Cashless Take Up
C: Sell all of your Rights
Take up some of your Rights and let the remaining Rights lapse
E: Take up some of your Rights and/or sell some or all of the balance of your Rights
F: Do nothing

If they dont just give them a ring and see what teh story is

Joeyjoejoe43

If I buy now at 0.10, does this rights issue affect me?

pennywise_11

Does anyone know if the right issue is not accepted by shareholders, would the the existing shareholders be wiped off completely.

What happens to the existing shares we have with the bank? Thnks.

pgav19

Joeyjoejoe43 wrote: »

If I buy now at 0.10, does this rights issue affect me?

No. If you buy today at 10c the rights issue doesnt affect you. However you would be buying into a much more diluted company, one with an extra 19billion shares

pgav19

pennywise_11 wrote: »

Does anyone know if the right issue is not accepted by shareholders, would the the existing shareholders be wiped off completely.

What happens to the existing shares we have with the bank? Thnks.

The rights issue was accepted by shareholders at the EGM this week, shareholders now have an option to take up the rights issue or not. The state will buy any of the shares that existing holders do not take up.

If there is a full take up from shareholders, the states holding in the bank will reduce to 29.2%, if no shareholder takes up the new stock the government will own 69.7%.

The state ownership levels will be somewhere inbetween those figures, hopefully below 50%.

You still retain your existing shares of the bank, if you do not take up the shares the proportion of the bank you own will be diluted

runnerbelly

hi guys, so what would you guys reckon would be the minimum shareholding you would require now in order to make taking up the rights issue worthwhile - if you were looking for a return over the next decade

alexlyons

if i choose to sell my rights what price will they give me per share?

Van.Bosch

pgav19 wrote: »

Option are currently selling at .1c (i.e difference between share price and offer price) So unless share price rises no point in selling.

I think i will take up the offer, it will bring my average down to 17c. As Tin Foil Hat said hopefully it will be at above the 20c mark within a year

Buying more now does not change that you still lost a fortune on the first batch. Lowering the average price paid is not a valid reason for investing. Lowering the average of your purchase price is purely cosmetic.

pgav19

Van.Bosch wrote: »

Buying more now does not change that you still lost a fortune on the first batch. Lowering the average price paid is not a valid reason for investing. Lowering the average of your purchase price is purely cosmetic.

Firstly, I haven't lost a fortune.
Secondly, averaging down has its advantages:

The main one is that an investor can bring down the average cost of a stock holding quite substantially. Assuming the stock turns around, this ensures a lower breakeven point for the stock position, and higher gains than would have been the case if the position was not averaged down.

Some of the world's most astute investors, including Warren Buffett, have successfully used the averaging down strategy over the years.

If its good enough for Warren it's good enoughj for me

Van.Bosch

pgav19 wrote: »

Van.Bosch wrote: »

Buying more now does not change that you still lost a fortune on the first batch. Lowering the average price paid is not a valid reason for investing. Lowering the average of your purchase price is purely cosmetic.

Firstly, I haven't lost a fortune.
Secondly, averaging down has its advantages:

The main one is that an investor can bring down the average cost of a stock holding quite substantially. Assuming the stock turns around, this ensures a lower breakeven point for the stock position, and higher gains than would have been the case if the position was not averaged down.

Some of the world's most astute investors, including Warren Buffett, have successfully used the averaging down strategy over the years.

If its good enough for Warren it's good enoughj for me

Say you buy a share at 10euro and the price falls to one, you are down 9. If you then buy x amount of shares at 1 you have still lost the original 9 but on average you have lost less due to buying x amount at 1. It's purely cosmetic in that the decision must be based on if at 1 you want to buy.

Buffet uses dollar cost averaging yes but only if it makes sense to buy at the lower price. In BOIs case an investor needs to think that they can make more out of BOI than another stock as the original trade is independent and does not get effected by any subsequent trades. Yes you can say I lost originally but I made some back by getting in low but it doesn't effect the first loss.

Sorry about the assumption of losing a fortune, a lot did, you re lucky.

pgav19

i understand where you are coming from Van Bosch, however i am not going to sell at a loss on my original investment...i dont mind if i have to wait years. By averaging down though i can cut the wait time and give me a position to sell quicker.

I know it doesnt effect the first loss but it makes it alot more bearable

Irish Slaves for Europe

pgav19 wrote: »

i understand where you are coming from Van Bosch, however i am not going to sell at a loss on my original investment...i dont mind if i have to wait years. By averaging down though i can cut the wait time and give me a position to sell quicker.

I know it doesnt effect the first loss but it makes it alot more bearable

But why are you assuming the price is going to rise. Theres nothing in the pipeline to suggest that. If anything its going to keep going down in the short to medium term. When the details of Greece's default have been agreed the price will go down. When Spain or Italy need a bailout the price will go down. When the US's credit rating is reduced the price will go down. When the effects of the recent mortgage interest rate rise hits consumers, the number of non performing loans will increase and BOI's share price will go down. When the new household taxes come in during the next budget the same thing will happen and the price will go down. When Ireland gets a second bailout in late 2012/early 2013 the price will go down.

You actions sound like that of a gambling addict on a losing streak who keeps increasing his stake on the assumption his luck is bound to turn.

pgav19

Irish Slaves for Europe wrote: »

But why are you assuming the price is going to rise. Theres nothing in the pipeline to suggest that. If anything its going to keep going down in the short to medium term. When the details of Greece's default have been agreed the price will go down. When Spain or Italy need a bailout the price will go down. When the US's credit rating is reduced the price will go down. When the effects of the recent mortgage interest rate rise hits consumers, the number of non performing loans will increase and BOI's share price will go down. When the new household taxes come in during the next budget the same thing will happen and the price will go down. When Ireland gets a second bailout in late 2012/early 2013 the price will go down.

You actions sound like that of a gambling addict on a losing streak who keeps increasing his stake on the assumption his luck is bound to turn.

You can't beat a good martingale, if only i had infinite wealth to back it up...look the bank underwent stress tests earlier this year - these dealt with effects that further economics hardships would have on its loanbook. Thats why the bank needs the capital and is issuing the new shares.

Operating profit for 2010 is expected to be around the 1 billion mark, it will have the capital reserves to deal with impairments, its of systemic importance to the irish banking system - one of the 2 pillar banks, it has a chance of the state not having a greater tahn 50% stake. So yes it has a chance of the share price increasing

Good loser

pgav19 wrote: »

You can't beat a good martingale, if only i had infinite wealth to back it up...look the bank underwent stress tests earlier this year - these dealt with effects that further economics hardships would have on its loanbook. Thats why the bank needs the capital and is issuing the new shares.

Operating profit for 2010 is expected to be around the 1 billion mark, it will have the capital reserves to deal with impairments, its of systemic importance to the irish banking system - one of the 2 pillar banks, it has a chance of the state not having a greater tahn 50% stake. So yes it has a chance of the share price increasing

Your chances of buying in the market at less than 10c over the next year are enormous.
Your reasons to buy now are just not good enough.
When there were 1bn shares price reached €20. On 40bn shares (see above) dilution alone would reduce pps to 50c.
Think of all that has happened since.
How about selling what you have at 10c and buying an oil stock?

TiGeR KiNgS

Before I confirm that I'm taking up the rights issue should I wait until the deadline date (this coming Friday) to see what happens in the markets ?

RizzoJR

pgav19 wrote: »

i understand where you are coming from Van Bosch, however i am not going to sell at a loss on my original investment...i dont mind if i have to wait years. By averaging down though i can cut the wait time and give me a position to sell quicker.

I know it doesnt effect the first loss but it makes it alot more bearable

theres a difference between "averaging down" because
you think stock still fundamentally sound
and
throwing good money after bad because you cant emotionally accept a loss

JR.

Van.Bosch

RizzoJR wrote: »

theres a difference between "averaging down" because
you think stock still fundamentally sound
and
throwing good money after bad because you cant emotionally accept a loss

JR.

you have managed to explain in 19 words exactly what I failed to do in about 500

whysomoody

RizzoJR wrote: »

theres a difference between "averaging down" because
you think stock still fundamentally sound
and
throwing good money after bad because you cant emotionally accept a loss

JR.

Its ok in one of them and not good in the other, answers on a postcard!

RizzoJR

whysomoody wrote: »

Its ok in one of them and not good in the other, answers on a postcard!

theres alot more to investing money in stocks than "bank of ireland"
and alot better more profitable ways at investing time than "bank of ireland"
stocks

ie any stock can make you money, not just "bank of ireland"

cashisking

if the recent independent news & media rights issue is anything to go by then boi are likely to do a share conversion( i think thats what its called), maybe something along the lines of 10:1, so that if you'd 10000 shares @ 10 cent a share this would be converted to 1000 shares @ €1 per share. this would blow the investment case for buying into the rights issue purely on the basis of reducing your average. so instead of hoping the share price might go up to say 15cent you could be looking at hoping it might go up to 1.50 after a conversion. which is not gonna happen, look at independent news and medias share price now, around 40 cent after it had touched 70-80cent after its conversion. i would stay well clear of boi's latest rights issue. i predict the price might touch 11 or 12 cent for a day or 2 if your lucky and then fall back under 10 cent whereby they'll do a conversion.

2 stroke

Yesterday was my first time looking at my banking shares since they went below €1. I'm almost certainly going to take up my option to buy. I'm not looking at averaging down, gave up on that idea. I've pretty much written off my existing shares, got some good dividends in the past, but for now they are filed away for 20 years. I'm considering this as a five year gamble, it's money I can aford to loose, I've often put more money on a horse. If it goes bad, I have one less foreign holiday.

Warper

There is no logical or sound reason why anyone should put more money into BOI. The Eurozone is effectively dead and the worst is still to come. Put your money on Cork, Kildare and Wexford to win this weekend at odds of 7-4 and wake the hell up.

2 stroke

Warper wrote: »

There is no logical or sound reason why anyone should put more money into BOI. The Eurozone is effectively dead and the worst is still to come. Put your money on Cork, Kildare and Wexford to win this weekend at odds of 7-4 and wake the hell up.

But still, more than 12 million of their shares were purchassed today. Who is buying?

Kristopherus

Warper wrote: »

There is no logical or sound reason why anyone should put more money into BOI. The Eurozone is effectively dead and the worst is still to come. Put your money on Cork, Kildare and Wexford to win this weekend at odds of 7-4 and wake the hell up.

Best suggestion in this thread. How anyone in their right mind would buy Irish bank shares is beyond me. Better off by far investing your cash with the local bookie.

Sonnenblumen

Perhaps it's more to do with in for a pound, in for a penny more?

bluefinger

RTE NEWS wrote: »

The State has agreed a deal with a group of private investors, which could mean they will put as much as €1.1bn into Bank of Ireland in return for a significant minority stake.
Investors are understood to include a Canadian fund, Dublin's Cardinal Capital and US businessman Wilbur Ross.
Neither the Department of Finance nor the bank will comment on the identity of the investors. The State was advised on the deal by Goldman Sachs.
Any shareholder with more than a 3% stake in the bank will have to declare their holding to the stock market on Friday.
Much of the work in the Department of Finance was conducted by the its own banking team many of whom have been seconded from the NTMA.
The maximum private investors will own will be 37% of Bank of Ireland and the minimum will be 14% but will rise to 19% after a top up.
The maximum the State will hold will be 32% and the minimum will be 15%.
The deal means the taxpayer will not own a majority of the bank.

Can someone tell me if this makes the share issue a more or less attractive punt? Does it take nationalisation completely out of the equation?

Good loser

bluefinger wrote: »

Can someone tell me if this makes the share issue a more or less attractive punt? Does it take nationalisation completely out of the equation?

I'm no expert. It's mildly good news for the shares. It takes nationalisation off the agenda for, say six months, not that nationalisation would be a total disaster. The shares were at 11c for quite a while today but closed at 10.2c I think. I may have seen somewhere that those entitled to rights may take up 25%. Goodbodys reckon they're worth about 8c. Good luck.

RR2026

I am entitled to 50 thousand bank of Ireland Rights Issue. I can leave these shares for 2/3 years, but I don’t want to lose out either. I am already bitten by the previous right issue. What should I do? Thanks

2 stroke

I think you just took option F. your rights to new ordinary stock lapsed at 11 a.m. this morning.

Sonnenblumen

Did I hear correctly reports of a 60% uptake? Decided to go again, seemed a reasonable gamble.

ranger4

Sonnenblumen wrote: »

Did I hear correctly reports of a 60% uptake? Decided to go again, seemed a reasonable gamble.

Wilbur Ross also believes bkir a good mid-longterm investment,

http://video.cnbc.com/gallery/?video=3000035609

SP will easily yield 1-200% in midterm.

karltimber

whats the ref to delisting for BIR that came out friday ?

Can BIR still be traded - don't understand the filing.

edit - found this - can share so fBIR be still traded on the ESM thru a broker as they were on the ISE ?

The Bank of Ireland is in severe jeopardy of being delisted from the Irish Stock Exchange (ISE) because if Ireland's Government has to infuse more cash, then their stake in the beleaguered bank will increase significantly from its current 36% ownership.
The ISE listing requirements state that at least 25% of shares be held in public hands. This is highly unlikely now, and in fact, IRE is seriously considering asking shareholders to delist to the Enterprise Securities Market where there is no requirement for shares to be held in public hands. Allied Irish Bank currently trades on the ESM.

ranger4

karltimber wrote: »

whats the ref to delisting for BIR that came out friday ?

Can BIR still be traded - don't understand the filing.

edit - found this - can share so fBIR be still traded on the ESM thru a broker as they were on the ISE ?

The Bank of Ireland is in severe jeopardy of being delisted from the Irish Stock Exchange (ISE) because if Ireland's Government has to infuse more cash, then their stake in the beleaguered bank will increase significantly from its current 36% ownership.
The ISE listing requirements state that at least 25% of shares be held in public hands. This is highly unlikely now, and in fact, IRE is seriously considering asking shareholders to delist to the Enterprise Securities Market where there is no requirement for shares to be held in public hands. Allied Irish Bank currently trades on the ESM.

Can you post actual link to this post, doesnt make any sence as govs stake to remain very low after 60% takeup with rights and Pi s investment, Smells of tree shaking to me.

ranger4

Not to worry old news as that story was posted on the 27th june,


The Bank of Ireland is in severe jeopardy of being delisted from the Irish Stock Exchange (ISE) because if Ireland's Government has to infuse more cash, then their stake in the beleaguered bank will increase significantly from its current 36% ownership.


The ISE listing requirements state that at least 25% of shares be held in public hands. This is highly unlikely now, and in fact, IRE is seriously considering asking shareholders to delist to the Enterprise Securities Market where there is no requirement for shares to be held in public hands. Allied Irish Bank currently trades on the ESM.


With respect to the NYSE, the biggest risk for IRE delisting is if their stock price stays below $1 for an extended period of time. However, I would expect the company to execute a reverse stock split to raise the stock price, which will only increase our risk exposure - that is, for stock prices to fall. Thus, I am writing off all bets with respect to the Bank of Ireland.

karltimber

Thanks ranger

didn't mean to alarm anyone - just not the type of news you like to see & not fully understand.

thx

k