AIR - Air NZ.

[Maxtrade]

Agree that the new route to New York is mainly about window dressing the revive and thrive story.
https://www.goodreturns.co.nz/articl...or+31+Mar+2022
Jarden and Craigs have updated their target price 1 year hence and see it as 60 and 64 cents respectively, average target price 1 year from now is 62 cps.
Required rate of return in this, which is obviously a very high risk industry, must be at least 10% per annum so that suggests a fair value of about 62 x 0.9 = 56 cps next month. That values the rights @ 3 cps.

I see it as less than that as noted earlier today.

Just for fun...One thing is for sure AIR's aircraft will not be climbing out anything like these ones https://www.youtube.com/watch?v=zC89uDi8mEg
Fun fact as to why airshow demonstrations with the F22 fighter jet are so short.
According to one video I watched the commentator said they burn US 300 gallons (about 1125 liters) a minute, nearly 20 liters a second on full afterburner and they only hold 7500 liters so you get about 5 minutes on full afterburner and its time to land. Obviously in combat anywhere not close to a tanker aircraft for inflight refueling one uses afterburner very sparingly lol.

The logic behind those still buying at todays SP is irrational. Buying in anything over 0.90c with the acquisition of a further two shares at $.53 would bring average share cost price down to around 0.65c. Which would at best break even on a stagnant turbulent stock. With no substantial dividends. Therefore buying in at todays SP in the 1.2's makes absolutely no sense whatsoever. As cost average price would be substantially higher than where SP will likely fall back to 0.5-0.6. Are current buyers not realising this. Or just hoping SP won't drop to near Cap Raise offer of 0.53??! Again it's another writing on the wall that blind hope seems to be missing? SP next week will be drastically different to where it is today.

[ordop]

Another thing I find frustrating is the media saying 'this is a 2 for 1 deal at 53cps'. Really that means it could also be viewed as a 1 for 1 deal at $1.06 when the current sp is ~$1.30. Doesn't sound remotely as attractive when you say it like that.

[Beagle]

The logic behind those still buying at todays SP is irrational. Buying in anything over 0.90c with the acquisition of a further two shares at $.53 would bring average share cost price down to around 0.65c. Which would at best break even on a stagnant turbulent stock. With no substantial dividends. Therefore buying in at todays SP in the 1.2's makes absolutely no sense whatsoever. As cost average price would be substantially higher than where SP will likely fall back to 0.5-0.6. Are current buyers not realising this. Or just hoping SP won't drop to near Cap Raise offer of 0.53??! Again it's another writing on the wall that blind hope seems to be missing? SP next week will be drastically different to where it is today.

I don't think a lot of the newbie investors have seen a rights issue like this before. Old hands know the share price gravitates down towards the rights issue price the closer you get to the end of the rights trading period. Its going to be an interesting month for the AIR share price...hope investors have their seat belts firmly fastened and tray tables folded away because extreme turbulence is imminent

[BlackPeter]

I don't think a lot of the newbie investors have seen a rights issue like this before. Old hands know the share price gravitates down towards the rights issue price the closer you get to the end of the rights trading period. Its going to be an interesting month for the AIR share price...hope investors have their seat belts firmly fastened and tray tables folded away because extreme turbulence is imminent

... and don't forget to mention the paperbags - they really might come handy :

[ordop]

or blowing on the whistle if they find themselves in distress.

[Bob50]

Have I got the maths right.
Jayden and Craig’s have a target price in one years time of 62 cents. Therefore each 3 shares held has a combined value of $1.86. 2 of those 3 shares need to be purchased at 53 cents each in the rights offer, this values each current share held at 80 cents.
And this is the ‘break even point’ if one wanted to make a gain in the next 12 months that values the base share even lower.
The big assumption I suppose is value in 12 months.

[Maxtrade]

Effectively what they have done is forced current shareholders to buy more shares to cost average down. Forcing shareholders to buy triple the amount of shares they currently have, ie buy an extra 2 shares for each share they currently own. If the shareholder chooses not to then they will see their share devalue to ~ 0.53- 0.64c range. So for example if someone paid more than $1 for their current AIR shares then rather than seeing those shares devalue down to 0.53 they are offering the shareholders to buy an extra 2 shares at 0.53, in order to cost average their buy in price down. Thats pretty rough for current shareholders. Basically forcing shareholders backs against the wall saying cough up more money or see your investment tank. With the result being loosing less on the SP decline. Own triple the amount of shares but worth 60% less than what they were recently trading at $1.5. Either way loose big if don't buy in 2 for each share owned, or cough up and buy in triple the amount of shares, and sit on a low end range bound SP with massive headwinds, not making a dividend. That's one way to financially extort more money in a Cap Raise out of existing shareholders isn't it! Either way SP will crash to Cap Raise price with all of this. Fact remains AIR has been hit hard by the Pandemic and now rising fuel costs etc. Will be interesting to see how long it takes for flight prices to go up. And the fine line of trying to get more people in the air flying again versus ticket prices being too expensive, along with higher inflation cost of living. Many challenges ahead. But for exhausting shareholders you really need to buy in more at the 2 to 1. But makes no sense to be buying in today into this mess as it looks like many buyers are. Wonder if they have thought it through clearly.

[JohnnyTheHorse]

Sharesies crowd in for another 400,000 shares this morning. Hard to resist such a discount by the looks of things.

[Maxtrade]

Sharesies crowd in for another 400,000 shares this morning. Hard to resist such a discount by the looks of things.

Someone needs to help educate them. Seems sharsies isn't being entirely open in its recommendations to its clients. Hopefully some of them might read this thread and get a better grasp and understanding of what all this means and how it will play out.

Whatever they are buying in now they are going to need to buy in another 2 times that amount of shares at "discount price" 0.53. Then end up with all these shares sitting at an average cost less than where SP will settle in at. Guys n girls think about it, does that make any sense? Maybe just sit back and be patient. Let it run its course. We will have plenty of opportunity to buy in at a lower SP after the Cap Raise than what your average buy in price will be if buy in at todays SP, or anything above 0.90 for that matter.

Best of luck to all. Take a parachute with you.

[winner69]

Effectively what they have done is forced current shareholders to buy more shares to cost average down. Forcing shareholders to buy triple the amount of shares they currently have, ie buy an extra 2 shares for each share they currently own. If the shareholder chooses not to then they will see their share devalue to ~ 0.53- 0.64c range. So for example if someone paid more than $1 for their current AIR shares then rather than seeing those shares devalue down to 0.53 they are offering the shareholders to buy an extra 2 shares at 0.53, in order to cost average their buy in price down. Thats pretty rough for current shareholders. Basically forcing shareholders backs against the wall saying cough up more money or see your investment tank. With the result being loosing less on the SP decline. Own triple the amount of shares but worth 60% less than what they were recently trading at $1.5. Either way loose big if don't buy in 2 for each share owned, or cough up and buy in triple the amount of shares, and sit on a low end range bound SP with massive headwinds, not making a dividend. That's one way to financially extort more money in a Cap Raise out of existing shareholders isn't it! Either way SP will crash to Cap Raise price with all of this. Fact remains AIR has been hit hard by the Pandemic and now rising fuel costs etc. Will be interesting to see how long it takes for flight prices to go up. And the fine line of trying to get more people in the air flying again versus ticket prices being too expensive, along with higher inflation cost of living. Many challenges ahead. But for exhausting shareholders you really need to buy in more at the 2 to 1. But makes no sense to be buying in today into this mess as it looks like many buyers are. Wonder if they have thought it through clearly.

Somebody has to bail them out

Still better than the government providing all the new capital and leaving existing shareholders with a pittance worth not very much at all