HSBC plunges on rights issue news

Except, really, it doesn\’t.

The terms are five for 12 at 2.54 as opposed to the pre rights price of 4.91.

So 12 times 4.92 plus five times 2.54 divided by 17 gives us 4.21 as the theoretically correct (umm, odd theory I know) price for the shares after the announcement of the rights issue.

Overnight the shares were 3.99. A five percent or so fall from where they should have been then.

Yes, a fall, but not really a plunge I think? 5% is hardly the sort of volatility to write home about in current markets, is it?

2 thoughts on “HSBC plunges on rights issue news”

  1. Tsk. Do keep up.

    HSBC is a bank. The only good bank is a dead… sorry, a nationalised bank. Official.

    HSBC will not play Gordon’s game. They don’t need to, after years of staying sober despite the impatience of some of their wilder shareholders, now happily tucking into a nourishing diet of humble pie. In consequence, they have been voted Bastards of the Year by the People Who Matter.

    Rotten fruit – including sour grapes – available free of charge from 10 Downing Street and all newspapers.

  2. HSBC is afloat because it internalised the global financial system – ie it raised deposits from consumers and businesses in Asia and lent them to consumers and businesses in the UK and US, rather than borrowing the money on wholesale markets to do so. Well done it.

    But it did that because, by a historical accident, that was where its main markets were – not because Bond or Geoghegan were geniuses. And it did waste an enormous amount of shareholders’ money on HFC.

    If you seriously think the government’s view on HSBC is anything other than ‘thank fuck we don’t have to sort that one out as well’, then you’re a demented conspiriloon.

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