Corporate actions and investing

[Debronic]

We have a few articles (and counting) explaining corporate actions and their implications on investing. Just thought it will be useful sharing some of them here in one thread to avoid spamming. A couple of them I have shared before under different threads so just bear with me if you have seen it.

Stock split vs Bonus issue
http://stockresearchasia.com/stock-split...issue.html

Reverse Takeovers
http://stockresearchasia.com/understandi...overs.html

Rights Issues
http://stockresearchasia.com/key-things-...ssues.html

For fresh updates or recommendations, you may wish to like our facebook page: https://www.facebook.com/stockresearchasia
Otherwise, will try to share here as and when free.
Or follow on twitter: https://twitter.com/StockResearchA

[cyclone]

We have a few articles (and counting) explaining corporate actions and their implications on investing. Just thought it will be useful sharing some of them here in one thread to avoid spamming. A couple of them I have shared before under different threads so just bear with me if you have seen it.

Stock split vs Bonus issue
http://stockresearchasia.com/stock-split...issue.html

Reverse Takeovers
http://stockresearchasia.com/understandi...overs.html

Rights Issues
http://stockresearchasia.com/key-things-...ssues.html

For fresh updates or recommendations, you may wish to like our facebook page: https://www.facebook.com/stockresearchasia
Otherwise, will try to share here as and when free.
Or follow on twitter: https://twitter.com/StockResearchA

Wah, so many links and lack of substances, I wonder it's to advertise, to spam or what ?

[Debronic]

We have a few articles (and counting) explaining corporate actions and their implications on investing. Just thought it will be useful sharing some of them here in one thread to avoid spamming. A couple of them I have shared before under different threads so just bear with me if you have seen it.

Stock split vs Bonus issue
http://stockresearchasia.com/stock-split...issue.html

Reverse Takeovers
http://stockresearchasia.com/understandi...overs.html

Rights Issues
http://stockresearchasia.com/key-things-...ssues.html

For fresh updates or recommendations, you may wish to like our facebook page: https://www.facebook.com/stockresearchasia
Otherwise, will try to share here as and when free.
Or follow on twitter: https://twitter.com/StockResearchA

Wah, so many links and lack of substances, I wonder it's to advertise, to spam or what ?

Wow...such a tactful comment by an admin no less. How is putting all the article links on one single post spamming? We do not sell anything on the webpage if you have even taken a look.

We welcome constructive criticism of the articles if you have any. Not quite sure what to make out of your "lack of substance" comment. The articles are all meant to explain the intricacies of corporate actions, something which I find the general investing public lacks. Just for example, if you can find one other source that explains to you how an RTO works and shell value is calculated, feel free to post it here.

If the forum users find the information I posted not useful at all and is a form of spam, I will stop contributing, no problem.

[cyclone]

I don't mean your articles lack of substances. I mean your post lacks of substances. With so many links to a website on a post, it makes me wonder it's to advertise your website, to spam the forum with the links, to promote your website, to share the articles or what ? I cannot make the conclusion yet.

If you'd like to share the article, you can create a thread, quote a paragraph or a few paragraphs and the link to the article. With a 4 points reputation, I think forummers don't think your contributions are not useful.

[bteo88]

We have a few articles (and counting) explaining corporate actions and their implications on investing. Just thought it will be useful sharing some of them here in one thread to avoid spamming. A couple of them I have shared before under different threads so just bear with me if you have seen it.

Stock split vs Bonus issue
http://stockresearchasia.com/stock-split...issue.html

Reverse Takeovers
http://stockresearchasia.com/understandi...overs.html

Rights Issues
http://stockresearchasia.com/key-things-...ssues.html

For fresh updates or recommendations, you may wish to like our facebook page: https://www.facebook.com/stockresearchasia
Otherwise, will try to share here as and when free.
Or follow on twitter: https://twitter.com/StockResearchA

Wah, so many links and lack of substances, I wonder it's to advertise, to spam or what ?

Wow...such a tactful comment by an admin no less. How is putting all the article links on one single post spamming? We do not sell anything on the webpage if you have even taken a look.

We welcome constructive criticism of the articles if you have any. Not quite sure what to make out of your "lack of substance" comment. The articles are all meant to explain the intricacies of corporate actions, something which I find the general investing public lacks. Just for example, if you can find one other source that explains to you how an RTO works and shell value is calculated, feel free to post it here.

If the forum users find the information I posted not useful at all and is a form of spam, I will stop contributing, no problem.

I personally think the articles are useful n informative n thank debronic for them..

[Debronic]

I don't mean your articles lack of substances. I mean your post lacks of substances. With so many links to a website on a post, it makes me wonder it's to advertise your website, to spam the forum with the links, to promote your website, to share the articles or what ? I cannot make the conclusion yet.

If you'd like to share the article, you can create a thread, quote a paragraph or a few paragraphs and the link to the article. With a 4 points reputation, I think forummers don't think your contributions are not useful.

Oh I see. No offense but the way you wrote it, it's very easy for people to misunderstand.

The articles are of decent length with pictures... that's why I rather put links and let people see them in the original state to avoid any misinformation. I will insert a few paras if it helps. I was trying not to create so many threads and posts to avoid spamming so I lumped them all into one post.

And just to clarify again, since I already explained this upfront when I posted a link a few months ago, I was helping my friend create awareness for the website and I am now also involved in contributing. Of course, when we spend so much time and effort doing research and writing articles, we hope people will visit the website and read the contents otherwise we wouldn't bother. That said, we only write and share what we feel are genuinely useful. I am not sure if you consider this as advertising.

[specuvestor]

We have a few articles (and counting) explaining corporate actions and their implications on investing. Just thought it will be useful sharing some of them here in one thread to avoid spamming. A couple of them I have shared before under different threads so just bear with me if you have seen it.

Stock split vs Bonus issue
http://stockresearchasia.com/stock-split...issue.html

Reverse Takeovers
http://stockresearchasia.com/understandi...overs.html

Rights Issues
http://stockresearchasia.com/key-things-...ssues.html

For fresh updates or recommendations, you may wish to like our facebook page: https://www.facebook.com/stockresearchasia
Otherwise, will try to share here as and when free.
Or follow on twitter: https://twitter.com/StockResearchA

Theoretically and accounting wise there is little difference for stock split and bonus issue, which was what I was taught in accounting/ finance 101

But as you pointed out there are regulatory safeguards under the Par regime. I actually think Par regime is good to help layman understand the fog of accounting. Taiwan continue to use this as a reference point for earnings and corporate actions.

And the other main difference is that one pays out of earnings. That means you actually need to have earnings to do bonus shares. Once transferred to capital it is relatively fixed while retained profits are more volatile.

Between the 2, bonus share give better signalling than stock split, which we also observe in the market.

Rights issue signalling effect is much more complicated and varies from countries to countries. For example in Korea and taiwan they are suspicious of rights issue that are priced too low for various reasons. Rights also have different connotations to perceptions of major shareholders' interest on one hand, and poison pill on the other extreme. It can also at times used to squeeze out the interest of weaker substantial shareholders.

My 2cts in the diff betwen accounting theory and market observation.

[Debronic]

We have a few articles (and counting) explaining corporate actions and their implications on investing. Just thought it will be useful sharing some of them here in one thread to avoid spamming. A couple of them I have shared before under different threads so just bear with me if you have seen it.

Stock split vs Bonus issue
http://stockresearchasia.com/stock-split...issue.html

Reverse Takeovers
http://stockresearchasia.com/understandi...overs.html

Rights Issues
http://stockresearchasia.com/key-things-...ssues.html

For fresh updates or recommendations, you may wish to like our facebook page: https://www.facebook.com/stockresearchasia
Otherwise, will try to share here as and when free.
Or follow on twitter: https://twitter.com/StockResearchA

Theoretically and accounting wise there is little difference for stock split and bonus issue, which was what I was taught in accounting/ finance 101

But as you pointed out there are regulatory safeguards under the Par regime. I actually think Par regime is good to help layman understand the fog of accounting. Taiwan continue to use this as a reference point for earnings and corporate actions.

And the other main difference is that one pays out of earnings. That means you actually need to have earnings to do bonus shares. Once transferred to capital it is relatively fixed while retained profits are more volatile.

Between the 2, bonus share give better signalling than stock split, which we also observe in the market.

Rights issue signalling effect is much more complicated and varies from countries to countries. For example in Korea and taiwan they are suspicious of rights issue that are priced too low for various reasons. Rights also have different connotations to perceptions of major shareholders' interest on one hand, and poison pill on the other extreme. It can also at times used to squeeze out the interest of weaker substantial shareholders.

My 2cts in the diff betwen accounting theory and market observation.

Yeah, but in Singapore, there has been a trend of bonus shares being issued without capitalising earnings, making it no different from a split. Bonus issues does sound better because if you look at the usual bonus issue announcements, they will tell you that it is to "reward" shareholders by giving them free shares. You can't spin the same tale when you announce a share split.

Rights issues signaling is definitely not straightforward as you rightly pointed out. There can be many reasons to do them and not all are to the benefit of the company and minority shareholders. As a rule of thumb though when it comes to pricing the issue, the weaker a company's finances are and the more desperate it needs the money, the cheaper the rights shares. For this reason, you rarely see GLCs offering more than 30% discount to TERP in rights issues even during the financial crisis.

[soros]

Are there any guides or strategies available for shareholders of companies which make good profits but Board of Directors refuse or just don't care enough for their shareholders interests to recommend a payment of dividend ?

[Nuthing03]

Imo, just avoid investing in this company. As a minority s/h, u can't do much to change the situation.