Wrong rights
Companies in the asset stripping game are finding it better to have rights issues than to trouble with bidding for companies and actually selling the assets at present share prices, providing those faithful old retainers, the share-holders, cough up. If you have let yourself be persuaded to take up shares during the recent flood of rights issues from companies who do not appear particularly to need funds, you should think seriously about getting out quietly and without delay, at any small premium you can still get or even at loss. More than one fund manager has been telling me of the rather less than calm approaches he has been getting from brokers and underwriters to recent rights suggesting their funds buy blocks of shares that were at the time of issue reported confidently to have been 'over subscribed.' "Weak sellers in the North" and similar tales are being put about.
There is a lot of such stock in weak hands — and some of the weakest hands are the principals of the companies who boast proudly at the time of issue that they are taking up their own entitlement. But, in the words of Mandy Rice-Davies, "They would say that wouldn't they?"
Remember that financiers never admit to being short of money like the rest of us, they usually just happen to have a few shares available in a brand new investment trust you may care to hear about.
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