LANKEM DEVELOPMENTS PLC (LDEV.N0000)

I have recently purchased 500 shares of LDEV. Therefore:

[/list]I am entitled to 7500 of shares from rights issue right?
I will have to pay 25 per share for these rights shares?
Then will I be able to sell all 8000 shares for a better price? How much will it be? Now its trading at 59
Any other additional costs? or anything I should know?

investor0000 wrote:I have recently purchased 500 shares of LDEV. Therefore:

[/list]I am entitled to 7500 of shares from rights issue right?
I will have to pay 25 per share for these rights shares?
Then will I be able to sell all 8000 shares for a better price? How much will it be? Now its trading at 59
Any other additional costs? or anything I should know?

I am entitled to 7500 of shares from rights issue right? YES
I will have to pay 25 per share for these rights shares? YES

You have to remember that when there is a right issue as big as 15:1 the share price will get diluted naturally first.

Ex : If share is Rs 50 on the XR day

After XR it should be = ( 15*25+50)=Rs 26.25. Remember that there will now be 15 times more shares i nthe market potentially.

But over time the share price can go up more than the above. Some time it goes up immediately due to manipulation , market sentimetns etc. Ex WAPO was a very good example. I cannot precdit the price for LDEV after rights issue but you get the idea.
Hope this helps.

Hi Investor
Thanks for pointing this rights issue out, I completely missed the news on this one

slstock has answered your question already, however there is a small typo:

After XR it should be = ( 15*25+50)/16=Rs 26.25 26.56. Remember that there will now be 15 times more shares (i.e. 16 times the current number) i nthe market potentially.

Rights issues are issued at Rs 25. Assume we bought one share and we are entitled to 15 more share at Rs 25 per share. To attract the LDEV rights at Rs25, assume that XR would be around Rs30 per share. So the total cost for 16 shares( original 1+ 15 rights) have to be Rs 480( 30*16). cost of 15 shares at 25 per shares is Rs 380. Therefore for share to be Rs 30 after the Rights(XR), LDEV present share should atleast move to Rs 105.(480-375). Otherwise investors wont buy the Rights at Rs 25. So I feel the share is really worth to buy now being traded at 58 levels. Hope it will gradually move to closure to 100. Open for discussion

DK wrote:Hi Investor
Thanks for pointing this rights issue out, I completely missed the news on this one

slstock has answered your question already, however there is a small typo:

After XR it should be = ( 15*25+50)/16=Rs 26.25 26.56. Remember that there will now be 15 16 times more shares i nthe market potentially.

15 times more shares = 16 times the current number

Yeap you are correct corrected that text

mahasen007 wrote:Rights issues are issued at Rs 25. Assume we bought one share and we are entitled to 15 more share at Rs 25 per share. To attract the LDEV rights at Rs25, assume that XR would be around Rs30 per share. So the total cost for 16 shares( original 1+ 15 rights) have to be Rs 480( 30*16). cost of 15 shares at 25 per shares is Rs 380. Therefore for share to be Rs 30 after the Rights(XR), LDEV present share should atleast move to Rs 105.(480-375). Otherwise investors wont buy the Rights at Rs 25. So I feel the share is really worth to buy now being traded at 58 levels. Hope it will gradually move to closure to 100. Open for discussion

There would be no reason why XR has to be 30. So long as XR is over 25, the rights issue would be successful.

@ DK
isn't it obvious that the XR would be above it's rights price in any case? (unless the company is stupid to issue rights at a value higher than market price)
so does that make all the rights issues attractive?

npp wrote:@ DK
isn't it obvious that the XR would be above it's rights price in any case? (unless the company is stupid to issue rights at a value higher than market price)
so does that make all the rights issues attractive?

Correct, but that does not mean you can assume that the share price will appreciate by 100% The share price of LDEV prior to the announcement was 46. Why would it jump to 105 so that the right can trade at 5 rupees? It can very well go to 60 and let the right trade at 2. Sure it can go 105, but then it can go to 150 as well and right would be trading at 7.

What I am saying is that the math doesnt work both ways. XR price is a dependant on the current share price. The share price is not necessarily dependant on the XR price except for what you mentioned, i.e. it has to yield an XR greater than issue price of the rights.

thanks a lot for all the replies......

how can I apply for the rights shares? will they issue all 7500 shares that I am entitled for?

Are there any other costs involved for me?

Cost of lankem development (LDEV) rights are more than the investment in lankem development share.. You think it is worth to invest.. I don't think so. 90% investors r playing the game of profit..game of black jack .. Easily during the price ban... They r not real investors....real investment will come from LCEY.. Lankem Ceylon.

Can anyone tell something about Lankem Developments at the moment...
more buyers and no one to sell after the last trade date... what are the suggestions in future trades...

banarahu wrote:Can anyone tell something about Lankem Developments at the moment...
more buyers and no one to sell after the last trade date... what are the suggestions in future trades...

What I can see is, Its goin up

swan03 wrote:

banarahu wrote:Can anyone tell something about Lankem Developments at the moment...
more buyers and no one to sell after the last trade date... what are the suggestions in future trades...

What I can see is, Its goin up

Yes I just missed it....

tkc wrote:

swan03 wrote:

banarahu wrote:Can anyone tell something about Lankem Developments at the moment...
more buyers and no one to sell after the last trade date... what are the suggestions in future trades...

What I can see is, Its goin up

Yes I just missed it....

Me too. Waiting until it comes down again .

swan03 wrote:

tkc wrote:

swan03 wrote:

banarahu wrote:Can anyone tell something about Lankem Developments at the moment...
more buyers and no one to sell after the last trade date... what are the suggestions in future trades...

What I can see is, Its goin up

Yes I just missed it....

Me too. Waiting until it comes down again .

I want to buy LDEV...But i never wish to come down....Bcz there are lots of my friends hold LDEV in this forum....

tkc wrote:

swan03 wrote:

tkc wrote:

swan03 wrote:

banarahu wrote:Can anyone tell something about Lankem Developments at the moment...
more buyers and no one to sell after the last trade date... what are the suggestions in future trades...

What I can see is, Its goin up

Yes I just missed it....

Me too. Waiting until it comes down again .

I want to buy LDEV...But i never wish to come down....Bcz there are lots of my friends hold LDEV in this forum....

Sorry Bro, I didnt mean that. What is the price to buy them in the current market?

swan03 wrote:

tkc wrote:

swan03 wrote:

tkc wrote:

swan03 wrote:

banarahu wrote:Can anyone tell something about Lankem Developments at the moment...
more buyers and no one to sell after the last trade date... what are the suggestions in future trades...

What I can see is, Its goin up

Yes I just missed it....

Me too. Waiting until it comes down again .

I want to buy LDEV...But i never wish to come down....Bcz there are lots of my friends hold LDEV in this forum....

Sorry Bro, I didnt mean that. What is the price to buy them in the current market?

I know that swan....you are a good friend....

tkc wrote:

swan03 wrote:

tkc wrote:

swan03 wrote:

tkc wrote:

swan03 wrote:

banarahu wrote:Can anyone tell something about Lankem Developments at the moment...
more buyers and no one to sell after the last trade date... what are the suggestions in future trades...

What I can see is, Its goin up

Yes I just missed it....

Me too. Waiting until it comes down again .

I want to buy LDEV...But i never wish to come down....Bcz there are lots of my friends hold LDEV in this forum....

Sorry Bro, I didnt mean that. What is the price to buy them in the current market?

I know that swan....you are a good friend....

banarahu wrote:

LDEV price hike is due to its rights issue of 15:1 at Rs25.
If we take LDEV price as 50, its theoretical ex right value will be 26.5

Now its price is 70 and that makes it rs27.8

TO happen all this, people have to buy 15 shares at 25, for each share that they hold.

if you hold 100 shares, you have to invest 37,500.
If you got 1000, its 375,000!

Once you invest that amount, your share amount will get multiply by16.
ex : if you had 1000 shares, you will have to pay 375,000 and you will end up having 16000 shares!

these 16000 shares will have a theoretical price of 27.8 each (using the current value of 70)

The questions comes then.. what are you going to do with this?

Now the illiquid share is no longer illiquid.. plenty of shares in the market..

if you can sell your shares at 27.8, you are break even
If you can sell higher value ... you get a profit!
If sell less than 27.8.... you make a loss...

So, before investing, you have to think at what price you can exit in the future..
Depends on that you can buy LDEV...

Im my view, LDEV could be sell around 30.

But, we have to do a huge investment to buy shares at 25... therefore now buying LDEV shares at 70 is too expensive for me.

What will be the ex rights price of LDEV? When will it be?

Genting wrote:LDEV price hike is due to its rights issue of 15:1 at Rs25.
If we take LDEV price as 50, its theoretical ex right value will be 26.5

Now its price is 70 and that makes it rs27.8

TO happen all this, people have to buy 15 shares at 25, for each share that they hold.

if you hold 100 shares, you have to invest 37,500.
If you got 1000, its 375,000!

Once you invest that amount, your share amount will get multiply by16.
ex : if you had 1000 shares, you will have to pay 375,000 and you will end up having 16000 shares!

these 16000 shares will have a theoretical price of 27.8 each (using the current value of 70)

The questions comes then.. what are you going to do with this?

Now the illiquid share is no longer illiquid.. plenty of shares in the market..

if you can sell your shares at 27.8, you are break even
If you can sell higher value ... you get a profit!
If sell less than 27.8.... you make a loss...

So, before investing, you have to think at what price you can exit in the future..
Depends on that you can buy LDEV...

Im my view, LDEV could be sell around 30.

But, we have to do a huge investment to buy shares at 25... therefore now buying LDEV shares at 70 is too expensive for me.

thnx... got it

Have to be there, will watch whats happening in the morning ...

Some times market behave very strangely. I think the buying price may depends upon the fact that, at what level of the process you wish to realize your capital and the profit ( since the LDEV is on a rights issue). I personally feel it will go up further due to this mega rights issue. Watapota share price raised nearly 8 to 10 times with introduction of more or less a similar right is issue. This is just their first announcement. May be go up further with the second announcement. Buy the way this is just my personnel view.

Fully agree with your below analysis, many of the current shareholders of LDEV are not potential investors in the rights issue. They are just punters.. Trying make big bucks from trading... You need to watch it carefully. lankem need to subscribe for 50% of the rights..and balance will be available to investors. Can it be another wapo.. If so it has to be better than wapo. LDEV has a better story than WAPO.. Question is how many people will believe it???

It could be another WAPO or it could be another MARA (Maravilla Resort).. Which one do you prefer...... We will see it in few days.

Genting wrote:LDEV price hike is due to its rights issue of 15:1 at Rs25.
If we take LDEV price as 50, its theoretical ex right value will be 26.5

Now its price is 70 and that makes it rs27.8

TO happen all this, people have to buy 15 shares at 25, for each share that they hold.

if you hold 100 shares, you have to invest 37,500.
If you got 1000, its 375,000!

Once you invest that amount, your share amount will get multiply by16.
ex : if you had 1000 shares, you will have to pay 375,000 and you will end up having 16000 shares!

these 16000 shares will have a theoretical price of 27.8 each (using the current value of 70)

The questions comes then.. what are you going to do with this?

Now the illiquid share is no longer illiquid.. plenty of shares in the market..

if you can sell your shares at 27.8, you are break even
If you can sell higher value ... you get a profit!
If sell less than 27.8.... you make a loss...

So, before investing, you have to think at what price you can exit in the future..
Depends on that you can buy LDEV...

Im my view, LDEV could be sell around 30.

But, we have to do a huge investment to buy shares at 25... therefore now buying LDEV shares at 70 is too expensive for me.

[b]

Unbelievable.... All transactions competed within 5 mins...

Its the expectations and the lying around cash that investors does not want to invest till end of month fueling this share! I also bought 500 shares of LDEV when I saw the announcement ( because of WAPO effect to an extent) and after doing some calculations about the rights price I saw its not really an attractive rights price for the current share price ( around rs 55). So I sold what I bought with a small loss! Now I really regret it.
I actually today bought another 400 shares around rs 75 after checking the market as I believe the market sentiment is quite strong for the share although the analysis I did not back the share! If what I expect continues like this I bet it will become something similar to WAPO although the WAPO rights price and its illiquidity was way better than this!
Just remember GREED and FEAR is what drives this market! Fundermentals play really a small role ATM.

hmm well, either way seems like I am the one who should eat my words

went like a rocket...