Qantas share's fall to $4.15

[Wirraway]

This is 5c less than the $4.20 offer to current QF shareholders
on the 1 for 8 offer, if this does not improve, QF could have
a problem raising their $200m from retail investers. the price
has fallen 54c from $4.69 last week when QF stopped trading.

Wirraway

[skychaser]

The stock exchange is a tough mistress. When you formally make it public that you think your shares are realistically worth $4.20 when they are sitting on $4.69 the market reacts. And has she been a disciplinarian lately. Qantas has themselves to blame. I know what I will do when I get my entitlement prospectus. I wouldn't be surprised if the shares continue dropping. They are such duffers because the institutional section was so oversubscribed. They could have said the offer was $4.60 and still be oversubscribed. Now they'll be unlikely to fill the subscription for the retail lot.

[MrWooby]

Q will just change the offer price.

[Whiskery]

Skychaser,

When you formally make it public that you think your shares are realistically worth $4.20

You do not understand what an Entitlement Offer is.

Qantas do not set the value of their share price - the market does. If you asked Dixon or Jackson what they thought QAN shares were "realistically worth" they would probably say $15.00.

IMHO, $4.20 is a good price for QAN shares at present and it is a good offer by Qantas. The shrewd investor will, of course, buy at market price until the shares go above the $4.20 barrier. Long term, you WILL make money from QAN shares.

[KaptinZZ]

I can see $3.15 or even lower if SQ announce that they want a slice of the action with a domextic ailine in Oz!

[skychaser]

Whiskery - My point exactly. The market does set the share price and at the time the offer was announced the Market had set the price at $4.69 not $4.20. Qantas put the valuation for its shares for the offer only at $4.20 not the market which, and I say it again, had the price of Qantas shares at $4.69. Qantas set the lower price to make sure its offer would be fully subscribed. And no, it may not go back up to $4.69 for quite a while or it could go back up there next week. Meanwhile I will wait and then probably have to chase it down because anything could happen between now and then. As I write, the shares are 2 cents above the offer price of $4.20.

[Whiskery]

skychaser read your own words!

. Qantas put the valuation for its shares for the offer only at $4.20

I say again, Qantas does NOT put a valuation on it's shares the market does!

For every 8.2 QAN shares you own you can subscribe to 1 new ordinary share @ an issue price of $4.20 - this is the entitlement offer. The figure of $4.20 per new share has nothing whatsoever to do with re-valuing, de-valuing or implying what the stock is worth.

[Keg]

Actually, the stock plummeting makes a lot of sense. The date set for the offer of the 8:1 shares was 23 Aug. Most of those that were offered them at 4.20 at would've sold about 12% of their shares to take the quick profit and then pick them up again at 4.20.

The rest of the market meanwhile realises that there is a good chance that when they get their 4.20 shares allocated to them that they may just sell them again to realise the next profit- hence the shares drop to- 4.20!

Now, any economist could probably pick holes the size of 777 engines in my logic there but you can hardly argue that the market has been exhibiting economic 'logic' for a long time!

Anyway, just my 2c.

[Going Boeing]

Keg, you are correct - the mum & dad investors have such a small percentage of QF shares that their trading activity does not have any effect on the share price. The institutional investors who took up the $4.20 offer have sold off to take the quick profit which has caused the share price to drop.

QF shares are certainly worth buying now - most analysts rate them a long term buy valued at about $5.60. GB. :D