Ebos Limited EBO

[glennj]

This is a moderately negative thing as far as I'm concerned. EBO have been good to smaller share holders over the years but this has burnt goodwill as far as I'm concerned. I've got 60k + shares so will look to start maybe taking some money off the table in case this is the start of a new pattern of disregard for shareholders. Today I took the small step of cancelling my DRIP participation. I may write to the company tomorrow and make it known that IMO a rights issue would have been fairer even if not a cheaper way to raise equity.

[Jaa]

You can't call the 8% below market value a cost to the company. A cash issue would have to be pitched at about the same level in order for shareholders to take up the offer. There would be more costs dealing with thousands of shareholders than what this is costing them.

I agree though that in fairness to shareholders that a cash issue is the preferred method .

Disagree, any "loss" or "gain" from a pro-rata rights issue is born by shareholders in the same proportion as they own the company so it is not "lost". A placement guarantees most shareholders own a smaller relative % of the company.

They are also cheaper, because if the discount is big enough (~20%), there is no need for an underwriter which costs the big $$.

To maximise shareholder goodwill, sell any unclaimed rights to the highest bidder and return the money made back to those shareholders. So there is not a penalty for being on holiday or being financially unsavvy. This is how you grow your shareholder base and the market as a whole. Treat people as you yourself would want to be treated.

[Biscuit]

I held EBO for over 25 years.No longer hold.
The PE ratio used to vary between 13 and 15.
The growth rate was between 12% and 20%.
Today the PE is 22.45 ,while the growth rate appears to be between 6% and 12%.
The current gross yield is a very modest 3.27%.

I bought EBO in 2010, with a few more added in 2013. Shareprice up over 200% in that time which is not too bad considering there has also been a reasonable dividend. Looking back to 2010, at the same time I also bought Delegats. Lower dividend but they are up over 500% in the same time and currently have a lower PE and have an unchanging and excellent strategy they always deliver on. I like EBO and a bit reluctant to sell, I think they are in a space (spaces) that has tailwinds going forward but I think their delivery is patchy, their strategy a bit incoherent, the shares are overpriced and the managers just shafted the shareholders.

[percy]

I bought EBO in 2010, with a few more added in 2013. Shareprice up over 200% in that time which is not too bad considering there has also been a reasonable dividend. Looking back to 2010, at the same time I also bought Delegats. Lower dividend but they are up over 500% in the same time and currently have a lower PE and have an unchanging and excellent strategy they always deliver on. I like EBO and a bit reluctant to sell, I think they are in a space (spaces) that has tailwinds going forward but I think their delivery is patchy, their strategy a bit incoherent, the shares are overpriced and the managers just shafted the shareholders.

Can't remember whether it was 1991 or 1992 when I first brought into EBO.Think their market cap was under $3mil.[not a mistake]
Not long after I brought in a broker suggested I sell, as he knew they were going to loose Clark's hip and joint agency.!!!!!!Luckily there was no sharetrader in those days!!!.lol.
Had a fantastic run with them.Was extremely difficult selling down a few,then a few more until such time I sold out completely.
A wonderful company with great stock turns and strong cash flows.

[Lewylewylewy]

If you dilute some shareholders to get money to spend on growth, those shareholders not participating in the raise end up with a smaller percentage of a larger company.

If the money raised isn't too discounted, and the money spent on growth is well placed, diluted shareholders can end up better off... or vice versa. It can be bad, good or neutral.

So...

We know the raise is slightly discounted (as it has to be too get interest). The allocation wasn't fair in opportunity, but did keep the cost of the raise down, which is the important thing. So, I conclude that the money raised wasn't too discounted.

The question is, will the money spent be earnings accretive... enough to make the raise in the interests of all shareholders?

Personally, I suspect it will only be slightly bad, though we can only speculate. Certainly it shouldn't be too bad, though i think the market will overreact.

[peat]

I was a bit miffed at the institutional placement excluding retail shareholders. How did you get offered some JT?

However I have every confidence that the money will be well spend so will just let it go.

The significant shareholder notice today from FMR (Japan) is a bit weird.
They would appear to be telling us today that they increased their shareholding more than one percent from transactions dated early 2018. This strikes me a somewhat delayed ??

Other than that buy on dips - not that there have been many lately!

[winner69]

Peat ...all those buy and sells FMR made from 2014 not once did they increase their holding by that 1% needed to make a disclosure ...until the other day

[Joshuatree]

Peat , Craigs rang us and offered us the opportunity. We are not big big $ clients of theirs either so down the pecking order somewhat..

[winner69]

EBO Directors and Management should hold their heads in shame

http://www.sharechat.co.nz/article/0...shame-nzsahtml

[peat]

this watering down thing has kicked in right ?