Is This A Buy Yet??????????? @115p

Some stuff from the other side.





In your example your £1K bought you 1000 shares.

These will be consolidated on a 1 for 10 basis, so you will have 100 shares.

You will then be offered 5 new consolidated shares at £1 each for every 2 non-consolidated shares you currently hold (the 10p ones), you will therefore be offered 25000 new shares at £1 a piece. If you take up the full rights your holding will be 25100 consolidated shares at a cost of £26K. You would need the consoldated SP to rise to £1.036 to get your money back.

However, a £25K investment is a pretty sizeable committment if you only had £1K invested beforehand.


Davius is that right... its 25 share at 12p?



No, rights shares are effectively 10p per share, not 12p. They are priced at £1 per new share (a new share is 10 old shares consolidated).

And you don't have to find the money to take up the shares. You can sell your rights, assuming they have any value. But if the rights don't have any value, then PAG today doesn't have any value either!

Thanks Driver, I think I will stick with GCM :)

Grief! - er Gulp!
- and I hate Companies that shuffle their shares . . . CONsolidation is just that IMHO - a CON, designed to make punters think Execs have done some good ( so they collect their Bonus), and . . . . . . that's allright then.

26Nov2007 (sp c.?1.40)...On news they were to sell-off the Car division...I said: " - - - I agree, it smacks of a Fire-Sale - not full blown, with sirens blaring - but a nasty whiff of smoke in the air.... - - - "

-And now punters see a sp that is halved at a stroke. . . .
Do I believe the sp now is "correct" and therefore worth a punt, or has this boat lost its engine last year and the rudder has stuck on some weeds and we're heading for the river-bank?

When I saw this today I thought: - Maybe a bounce, ie Worth a punt, but my hands have remained in pockets for some while now and in these "Troubled Markets" I suspect that is the best place for them.

When posters "here" can't fathom out what the effect of the Rights will be, and we can't find the "price", . . . . . . . . . . . . it smacks of Management having to put out a statement before the deal is fully worked-out.
-OR - the deal is so bad they hope that by releasing it gently the damage will be minimal.
To use another water-word:-
- BARGEPOLES

I just hope those who bought arround Nov07 have a few gains elsewhere to balance.
.......but all Sectors are affected and anything connected to Property, or Banks (esp. Mortgages), and worst of all IMHO is Sub-prime, or what we call Buy-to-Let, for it has been reported elsewhere that B2L investors have been relying on Capital Gains to offset poor Rental-returns since about 2005 - fortunately 2005, 2006 and most of 2007 saw house-prices rising, as folk continued to believe they "had to " get a Mortgage, before Interest-rates rose.
What they appear to have missed is that for every 1/2 percent rise in interest the Housing Market stalls and many properties are being offered at discounts of 10% - 20% and more.
Paragon sold ( did they?) their car-loan business I read - and this was a sensible thing to do, but far too late IMHO. . . . Car sales have been down for years as new models offer "cashback". This affects the secondhand market as folks can't make sense of it; and it looks like waiting is Good.

My suspicion FWIW is [PAG], correct-price with this rights is 50p - but if the take-up is shakey, or Others sell their old shares, then it could easily drop to 30p; demonstrating the true-worth of this Management and their abilities to plan forward.
I cannot see new housing being a good investment for at least a year and if past-experience is anything to go by, it could be more than 2 years before there is any hint of housing-recovery and that will start in North-London ( the Olympic-anticipation ). . . .
Any opposing views...?

hangon
Cheers good post I agree with the housing for at least another year and the rights statement is just a mess
Hands in pockets it is then.

Is this proposed share consolidation and rights issue merely an attempt by the underwriters to take control of PAG if existing shareholders dont take up the offer?

Driver shouldn't the above example be you'd be offered 2500 shares at £1 and if taken up in full folding would be 2600??? 1000 shares @ 0.10 / 2 gives you 500 times 5 = 2500 + the consolidation total holding 2600..... Anyone else working this out the same????

explosive
Yes and I still don't like the look of it.

The question is what will the shares be worth after the rights issue?

In the past I have purchased shares in a rights issue, to find that there was a lock in period of a week or so, to work out uptake and float the rest on the market. During this time it may well be possible to purchase at a lower than float price with no lock in. Remember just because you hold you don't have to buy more shares at float price. Thankfully I was out of this one a month or so ago, but will watch with intrest as the full extent of the dilution becomes apparant. DYOR.

This rights issue with the consolidation is a huge dilution especially as funds raised are to be used to pay off lenders however needs must, without this would PAG survive. NRK all over again!

Unfortunately I have got caught up in this one, I had a stop loss on the postion and got closed out this morning at the lowest price of the day at .55p. I bought the shares back at a higher price. I am not going to buy any more share in the rights issue. I am having difficulty in understanding how I stand in the rights issue. I would just like a simple to understand explanation of how this will end up. Lets just use an example on say 10,000 shares for eg. can any of you explain to me the position. I do not think the shares will drop now they have settled today around .62p. I am making a terrific loss on this one, and to say I have a bad cold at the moment. This was the last shock I needed for the week end. This may be an opportunity for other to enter. We will have to wait and see. Good luck all.

Have any others on here been caught out on this one?

janet .... don't feel like the lone ranger is dumb choices of shares ..... i have been a star performer in that particular league in the last couple of weeks, and i am sure there are plenty of others who are just too shell-shocked to hold their hands up ..... for me, thank goodness for IEC and a couple of others!

cut your losses, dust yourself down and work out a strategy to rebuild

british bulls were saying this was a buy at 1.20 a few days ago, so much for brit bulls They are now telling people to wait. Their last sell recommendation for this stock was the beginning of dec. I do not think a deal to british bulls they get it wrong many times.

article in the times today. For each paragon share held. You will get one share for each ten shares held. So for eg. If you hold 10,000 shares now. Your existing shares will become 1000 new shares. My existing shares average out at 1.10 per share. For every share then I will have the right to buy 25 new shares at the 95 per cent discount of the closing price on thursday. So I would then be entitled to by 25,000 new shares at .092004p per share. If I was to do this then the average price of all the shares would be around .49 pence per share. If all was to go successfully. Existing share holders who hold the shares from the higher price of say 1.00 or more would have a good chance of recouping their losses rather than selling now and taking the loss. So in my case providing the share does not fall below .49 pence. Then I could break even at.49p. If existing shareholders do not go for the offer of the new shares then their existing shares will be diluted by 90 percent. Then you would really do your brains in. This is like a blackmail situation saying if you do not go for their offer then would will loss another 90 percent of the share value. I suppose I will have to go for their offer. Unless the position changes before the time. If existing share holders can afford to buy the new shares and providing the rights issue is successful then all could be okay on this one. This could be a wonderful buying opportunity as well for anyone going in now at a price of .61.5p. These will be the people making big money out of the rights issue. Not me. Cynic have a look at the article in today times online and give me your opinion. If I was to sell now I would be onto the terrific loss.

janet ..... i get the Fascist Gazette (Telegraph!) from which I quote below .....

"Investors who do not take up their rights will see their holdings diluted by 96.2% ..... Paragon is unlikley to be sold until the markets improve"

imo, buying opprtunity this is not! ..... as for your personal decision, i am afraid it is very difficult to give any advice, but i really cannot see you making good for at least 12/18/24 months and maybe not even then.

thankyou cynic.

hoping to open up a short on monday morning, if not then i'll sell it on CMC, can see this falling heavily throughout that week. Who would take up shares in a company that really couldnt be in a worse market at the moment and couldnt be in a weaker position. Paragon is desperate for money in a market where there is none available, its lenders arent going to extend deadlines and I think it will be in serious trouble for the rest of the year and beyond (if it makes it)

it may not be possible to short, not least because someone will need to be willing to lend stock

Their lenders havent pulled the plug yet. As I said in an ealier post if shareholders dont take up their rights the shares will be taken up by the underwriters who may turn out to be the repaid lenders. In other words a cheap debt for equity swop with control of the company passing to the banks.