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?