0

A company I was holding recently did a Rights Issue, giving me an extra x amount of shares in a new line from the main shares at a lower price. After reading http://www.investopedia.com/articles/stocks/05/062905.asp I decided to sit on these new shares as it was my understanding that these would be merged back into the main line at some point and then the final price of the merged line would be somewhere in between

Checking my broker account this morning I found that the new line shares have disappeared into my 'Inactive portfolio' where things I used to hold are recorded, however I still have the same amount of main line shares; it seems like the new line has just been deleted and not actually merged back

Did I misunderstand the situation, and was I supposed to sell these new shares (if so, who would buy these considering they disappear after a short amount of time?)? Am I just being jumpy and the new shares will turn up in my account eventually? Was I supposed to manually request the merge take place or something?

4
  • Did you check with your broker first ? It takes some time for the new shares to be credited to your account to be able to trade them. And whats up with the terminology new line from the main shares ? Which financial dictionary are you reading ?
    – DumbCoder
    Sep 2, 2016 at 14:46
  • I have sent an email to my broker, will see what comes back. No particular terminology, just trying to articulate things without fully understand the situation
    – Madden
    Sep 2, 2016 at 15:10
  • Which broker and which shares ? Why don't you give them a call, which would be faster.
    – DumbCoder
    Sep 2, 2016 at 15:30
  • Degiro and MRO, I left my phone at home and I'm at work so can't call
    – Madden
    Sep 2, 2016 at 15:45

1 Answer 1

4

A company I was holding recently did a Rights Issue, giving me an extra x amount of shares in a new line from the main shares at a lower price

Did you participate in the Rights issue and purchased the extra shares by paying the x amount? Rights Issues have to be exercised and are not granted by default.

The Right to buy can be transferred to someone else for a consideration or free.

however I still have the same amount of main line shares; it seems like the new line has just been deleted and not actually merged back

My guess is the shares were visible for you to exercise the option to buy them, or trade your rights. If you haven't done any of these, it expired.

Am I just being jumpy and the new shares will turn up in my account eventually?

If you have purchased the Rights issue, then it could be transition and the actual shares would start showing up.

1
  • I am not sure. I was given a new holding called 'New <company> NP', which had a lower price than the main line, at the same time the main line price was readjusted; I received enough of the new line to cover the main line drop. I then bought some more of these NP shares as I thought this was the subscribing mechanism. Basically, I thought that after the subscription period, all the NP shares I had would be turned back into real shares. I could not see any other way of 'subscribing' or exercising the issue other than to buy and sell these NP shares
    – Madden
    Sep 2, 2016 at 12:36

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .