TUI AG Rights Issue

Thanks @Mika @xiano8494,

'Just for clarity, regarding your final q&a, T212 don’t offer the option to buy (or sell) subscription rights

On this point, so it’s basically use it or lose it. If I don’t subscribe to rights, I don’t get any from the proceeds for my rights been sold on the market?

No, that’s not the case.

While you can’t buy or sell your rights, at the end of the subscription period, you have two options, either buy the shares, or allow T212 to sell them on your behalf. If you choose the latter, T212 will sell the shares to the market and you will be credited with the profit.

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I received an e mail from trading212 for the right issue. I confirmed and money withdrawn from my account to buy the shares. However, I still see those shared added to my account yet. Any idea guys when will I see them in my account ?

Shares will appear in your account sometime after the 29th January.

In previous rights issues I subscribed to, they appeared pretty quickly after the date that T212 had stated.

@Mika thank you for the clarification.
If I understand correct since 212 does not offer the ability to sell/buy the rights it’s a take or leave it option.
My question is that e.g. for my case I can get 68 additional stocks on a total price of 72.76EUR therefore the final price per stock is indeed 1.07.
Am I right?

Yes, that’s right.
You have the rights, so you don’t need to buy the rights first. Mika was talking about buying the subscription rights from someone else to then get the right to buy shares at 1.07.

Thanks @xiano8494 for the response ! Do you know if there is a specific window that someone can sell the stocks? Is there anything special between those stocks and the ones bought before 8th of January?

No, no specific windows, and nothing special about them. Once you have the shares they are exactly the same as any shares you bought on the market prior to the rights issue, you can choose to hold them indefinitely or you could sell them immediately (or anything in between)

Investors holding depositary interests over the Company’s shares (DIs) on 11 January 2021 will be credited with pre-emptive subscription rights (DI Pre-Emptive Rights) that will allow them to acquire additional DIs representing New Shares at the Subscription Ratio.

I copied the above from TUI’s communications. How come 212 is saying you must have bought the shares before 8am 8/1/21? Looks to me like those who purchased on the 8th should be eligible?

Check out my earlier post here: TUI AG Rights Issue - #53 by xiano8494

You had to be on their books on the 11th, which meant you had to have been holding at 8am on the 8th.

Excellent read. Thanks for posting.

Can somebody help me with the maths behind this please? Am I correct in saying that the price of any stock should drop due to the rights issue, on the ex-rights date, in this case 8th Jan? So on 8th Jan, the stock price of TUI should have dropped to a price that means you’re not really any better or worse off buying on either 7th or 8th (excluding external factors.

On 7th Jan, it was trading around 490p. So with 29 shares needed to buy 25 new shares at 95.62p, wouldn’t that make the new price of TUI theoretically 307.4p on the first day of trading ex-rights?

But on 8th, it spent most of the day hovering around 400p? Why is that? Or have I just done some silly maths?

You’re right Tom, effectively the value leapt on the 8th. The actual price of a share didn’t fall anywhere near as far as it “should”.

Google (among others) very kindly (or confusingly, depending on how you look at it) adjust the historic price to take into account rights issues (and stock splits).

Google show the adjusted price on the 7th as ~305p, but as we know it was actually ~490p

Ah perfect, thanks for explaining and clarifying; I did the maths and worked out I will have made quite a lot of money once I receive the new shares but wanted to check I hadn’t missed something! I have to say that when I saw the price drop on the Friday I presumed it was because of the UK testing requirements. Does anybody know of any good websites that notify of things like rights issues or stock splits?

I wanted to ask you if there is any limitation in selling the stocks that were bought before 8th of January. Am I going to loose the right if I seem them? I have already made the purchase for the rights

No. So long as you held them at 8am on the 8th, you’re good, you can sell them and you’ll still be eligible to take up your subscription rights.

Thank you very much!!

Hello Friends, quick query, I have 255 TUI shares and am eligible for 209 TUI shares via the rights issue. But I only have 88 GBP free in my ISA account , rest is already invested. When I click on my Trading212 rights issue link, it says insufficient funds so please can you suggest what are my options. I emailed Trading 212 Support but no joy so far.

I was hoping that I could buy atleast 88 shares but it seems either all or none scenario ?? thanks

You can only take up all, or none. You’d need to sell some holdings or pay in more funds if you want to take up the full offering.
One option is to sell enough TUI shares to take part in the offering, which is known as “tail swallowing”.

That said, if you don’t take it up, you’re rights will be sold on the market and you’ll be credited with the proceeds (The difference between the offer price and value that the shares obtain on the market), so it’s not a total loss. You could, of course, choose to buy TUI shares with the proceeds when it is credited.

thanks xiano8494 for your response. I am new to ISA trading and I was under the impression that even if I sell shares, Trading212 wont let me buy new funds via that as yearly allowance is 20k and I have so far invested 19,918 so far. thanks again.