IAG Rights Issue

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166

The way T212 handled the IAG rights issue not only raises questions about the value of their service but, on 22nd Sept, I also received completely incorrect information from a T212 employee about how the rights would be calculated. In that same conversation (chat facility), when I queried the ‘shortly’ timescale, I was told that rights proceeds would be paid out ‘some time’ after October 7th (which conflicted with the ‘shortly’ timescale in the email sent out). Again, totally incorrect information.

I have made a complaint to T212.

Up until now, I was pleased with T212 but this experience has decimated my view of the platform and what to expect in terms of customer service.

The limitations in the T212 platform are notable in the way rights issues are handled, compared to other (admittedly paid for) platforms.

Placing a customer in control of their rights (via the trading platform, not a link in an email) would have mitigated this.

The price of ÂŁ0.1411 achieved over the course of 21st and 22nd is appalling considering the highs and lows achieved on the days in question:

https://uk.advfn.com/stock-market/london/intl-con-air-r-IAGN/share-price-history?nomobile

Whilst the rights did fall sharply on Monday and the high of ÂŁ0.309 would have been difficult to achieve, over the course of the two days, a price of considerably more the ÂŁ0.1411 would not have been difficult to achieve.

By the end of the trading session on 21st, perhaps liquidity was a problem but the price had recovered markedly off the low of the day much earlier and that is why the ÂŁ0.1411 looks poor (especially if the price was achieved over two days).

The T212 employee I mentioned earlier in this post told me the rights were sold on 21st Sept, by the way (so again, another conflict with the info above from Peter).

I would suggest that customers might want to see (or demand) some sort of audit trail for the rights trades (date/time, prices achieved, etc…)

Again, that’s the issue of not being in control of your rights. If you sell, you know what price you got, when you got it.

Here, we’re relying on blind faith (and my own faith in T212 is much reduced).

167

I definitely feel the same way!

And on top of everything you’ve mentioned, I was lead to believe that all my entitled rights would have been sold on and not just the amount I already own. Very disappointing service.

168

First of all, thank you for spending the time to voice your opinion and criticise in a respectful manner.

We are sorry to hear that any doubts have arisen in you, regarding the quality of our services and we hope that we will make it up in the events to follow. We appreciate your feedback and we’re working hard to ensure that such inconvenience will be avoided in the future. You can be certain that none of our intentions was to make you feel that way about our service.

Regarding the rights issue - we see that the current setup is unable to handle those capital raises, becoming more and more frequent and complicated, so we will take the necessary measures as mentioned earlier so that you can choose what and when to do with your investments.

For the specific case:
The rights were indeed scheduled to be sold on 21st of September (so the CC told what is known to him/her) near the end of the market session, but due to lack of liquidity the process continued in the morning of 22nd, where the price has gone down even more and resulted in lowering the avg price.

The 7th of October is the day that the newly issued shares will begin trading and shortly after will be distributed to the eligible accounts. So this is a mistake made by our Customer Care, who confused the rights with the shares in an effort to answer your query as fast as possible, so once again, please excuse him for doing so. @SMT74

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169

We’ve sent you an e-mail with information regarding the issue, which included the following:

The requirement for participation in the rights issue by the IAG shareholders is as follows: For each existing share of IAG held on 14th of September, its holders are entitled to one subscription right and 2 subscription rights are required to subscribe for 3 New Shares.

As much as we want and try to reply to everyone and all queries in the forum, it is a place for the users to communicate and exchange information with everyone in it (users and staff) - what it isn’t, is a place that guarantees you an official answer from our teams and cannot substitute your own research and responsibilities concerning your investments.

As mentioned in a previous reply from me - we are sorry to see some of you being not informed enough by various reasons and not being satisfied with their decisions and results. We will work on providing better service for the events to come.

170

Hi Peter

I’m afraid that whilst I’m sure there was no deliberate attempt to mislead, there was no need to answer the question “as fast as possible”. Just accurately. The information provided was so incorrect that it was embarrassing. For T212 to get things this wrong is not excusable, I’m afraid.

I hope that my email sent to Nick Saunders will result in an audit trail being made available regarding the claimed £0.1411 price achieved for the rights. As I’m sure you can appreciate, when one is presented with the quality of information that I was (transcript copied below, relevant names removed out of respect), it does make one question everything, including the real price achieved for the rights.

I do appreciate your comment that the forum cannot provide such an answer in that regard and I hope that the complaint I’ve instigated will have the effect of improving customer service for all and improve your future management of rights issues.

Chat started on 22 Sep 2020, 03:36 PM (GMT+0)
(03:36:17) *** Me joined the chat ***
(03:36:17) Me: Hi I sent a message yesterday asking when the IAG rights proceeds would be paid out (I did not participate in the rights issue). I was told it might have been yesterday or today. But I still can’t see any payout for the rights? Cheers xxxxxx
(03:36:21) *** T212 Representative. joined the chat ***
(03:36:40) T212 Representative.: Greetings xxxxxx, I would love to be of assistance!
(03:36:56) T212 Representative.: The payout for the clients who haven’t participated will occur after the 7th of October.
(03:37:12) T212 Representative.: This is the time the event will take place.
(03:37:46) Me: Hi Antoni. But the email said ‘shortly after’ and I was told yesterday a very different timescale.
(03:38:16) Me: I thought Oct 7 was when the rights issue shares would become available / tradable.
(03:38:17) T212 Representative.: Yesterday was the final day at which the clients were able to subscribe.
(03:38:40) T212 Representative.: Yes, you are correct, this is the same time in which the pay-out will occur.
(03:40:04) Me: The email said the last day to take up rights was 20/9. The info you’re now providing seems to conflict with the info in the email (I’m not getting at you btw, I appreciate you’re only passing on info). It’s just that shortly after is not Oct 7 in my view.
(03:40:39) Me: When were the rights sold for those that didn’t take them up and what price was achieved/
(03:40:44) Me: ?
(03:41:10) T212 Representative.: They have been sold yesterday.
(03:41:27) Me: And the price?
(03:43:05) T212 Representative.: Allow me to double-check the matter, please.
(03:43:20) Me: Thanks.
(03:44:10) T212 Representative.: Thank you. I’ll be right back.
(03:45:19) T212 Representative.: Alright, it would be the difference between the share prices.
(03:45:33) Me: Can you elaborate please?
(03:45:56) T212 Representative.: Yes, it would be the difference between 88 and the price of the instrument when it opens after the 7th of October.
(03:46:31) Me: Again, that’s not what the email said.
(03:46:57) Me: “If you decide to not participate, your rights will be sold on 21.09 at the market and the proceeds will be distributed shortly after to your account”
(03:47:03) Me: That’s not the same thing.
(03:47:47) T212 Representative.: Yes, the rights are being sold to the market and clients are being reimbursed with the difference of the two prices
(03:49:03) Me: OK, so, to be clear, if the rights were sold yesterday at 15p (as an example), what would I receive?
(03:49:53) T212 Representative.: You would receive quantity * (88- 15 = 73)
(03:51:26) Me: OK, so I had rights to buy 558 additional shares. So I would receive 558 * ÂŁ0.73 = ÂŁ407.34?
(03:52:01) T212 Representative.: Indeed
(03:52:09) T212 Representative.: That is correct.
(03:52:26) Me: So on Oct 7, I will receive ÂŁ407.34.
(03:52:47) T212 Representative.: It will be after the 7th of October, yes.
(03:53:56) Me: So obviously any date between now and the end of time is after 7th of October, so when realistically will customers be paid out?
(03:54:26) T212 Representative.: They will be paid after the 7th of October.
(03:54:49) Me: To be fair though, that’s not an answer.
(03:55:14) Me: My concern, again, goes back to what the email says.
(03:55:40) T212 Representative.: I fully understand your concern. All actions in regards to the event will be executed after the 7th of October.
(03:56:26) Me: Is Nick Saunders still the MD of Trading 212 UK?
(03:56:53) T212 Representative.: Yes he is, that is correct!

171

You are right and indeed the information provided wasn’t accurate. The whole setup of the IAG rights issue is a bit more complex than usual, thus it is provoking a lot of confusion and misinterpretation of the information. We will work to streamline the process further, ensuring that such inconveniences are avoided in the future.

Still, if you have escalated further the matter as per the compliance procedure (which is your right in case that you’re not satisfied), then you can expect that our team will reach you in the established timeframe by the regulator.

172

For what it’s worth… and I understand NOBODY asked for my opinion, but here it is:

One. T212 are partly to blame as not creditting the Rights to people accounts and allowing them to “see” the Rights and the Rights value causes confusion. I understand “why” they do it as when I administered events of this type people trading Rights was a nightmare as you, as a nominee, need to make a legally binding election on a constantly moving underlying stock holding. However, it leads to confusion.

Two. Unfortunately, and I’m going to be unpopular, there is a fundamental gap in “new” traders understanding of events such as this. The sheer volume of queries I got on this subject was crazy. And, unfortunately, most the queries demonstrated that new traders didn’t understand the basics of this event. Now, you could argue this stems from T212s bad comms. Fair enough. But the gap in this instance from the user was in part “maths” and “logic”. The ratio of the rights output and the absolute downward pressure this issue would put on the ords. The fundamental misunderstanding that the “rights” are in themselves tradeable instruments with a value - but a value absolutely linked to the underlying Ord to which it was going to turn into. A lack of understanding how the rights would trade, how they were valued and how they would lapse. Corporate Actions (events such as these) are somewhat complex but a quick spreadsheet of “what do I have” versus “what am I being offered” versus “what would that cost me” versus “what approximate total value would I have spent” versus “what approximate value of all these old and new assets” would present a basic picture of your outcomes.

So, whilst I’m tempted to say T212 handled this badly (because they did) I think we’re going to have to collectively wear a portion of the blame here for not educating ourselves as much as we should/could? Maybe. Fair? I dunno. Maybe.

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173

It was all in IAGs documentation and as clear as you can get. This included what you were entitled to and the dates of when everything would happen. The only difference was the options that T212 were offering which were described in this topic.

I’m inclined to agree with you @Finki, T212 has room for improvement in this, but imo understanding the stocks you own and what the company is doing and offering is ultimately up to the individual to ensure they know what’s going on, not 212.

174

My rights were to 4500 shares. So as far as I knew I was going to have 4500 rights sold on as I didn’t participate in buying them. I recieved the value of 3000 rights.

175

You had 3000 rights, these are what were sold. Two rights gives you 3 shares if you exercised those rights. It’s stated plainly in IAGs documents which you should have read through in detail.

T212s communications might not have been 100%, they absolutely have some blame there, but these are your stocks, it’s up to you to know what’s going on with them and the information was all there published by IAG.

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177

@PeterA Do we know when the RI shares will begin trading? They aren’t appearing yet.

178

Hello @OneSimon,

Based on official documentation shares have been already admitted for trading on the Main Market. We are awaiting the transfer to be completed by our intermediary so we can pass it on to the eligible accounts. Hopefully, the matter will be settled by noon tomorrow.

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179

Tempted to get in here but not sure if this event is over yet? I was expecting something of a drop today, but I guess it had already been priced in.

180

Do we have an updated time on this?

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181

Yeh other providers have allocated to investors already according to users on other forums I use

182

There is an issue with the distribution from CREST.

No one has yet received from the newly issued shares.

Awaiting on resolution of the issue any time now.

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183

It’s 12:40 and still my account not be update with the new IAG shares.

184

@PeterA , I’m assuming trading 212 app will send notification as well once we received them rights?

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185

Still haven’t received my shares…Any idea when we will receive them? Will it be today? And will we receive a notification on the app?

186

There is an update on the original IAG announcement stating that CREST tech issues have delayed the allocations .

I’m sure they will update when they can :slight_smile:

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