Rights issue - confused, concerned

[cairanvanrooyen]

I had three long positions in Rolls Royce and there has been a 'rights issue'.

Can someone please explain in plain simple English what this means.

I am very confused what happens to my long positions - I believe I have an option to 1. take up the rights, 2. do nothing and let rights lapse or 3. trade out of the rights.

I think this means that I can get more shares for each one that I hold? What then happens to my previous long positions, stops etc?

[TFFX_]

Bes to have a read of the terms for the rights issue from RR - this will give you a better idea of what they are offering. 

Also, have a look at the below article from the Telegraph - it broadly cover the three items you mentioned above:

https://www.telegraph.co.uk/investing/shares/rolls-royce-raising-money-rights-issue-should-worry-invest/#:~:text=What is Rolls-Royce doing,to help raise £2bn.

 

 

[cairanvanrooyen]

Thanks @TFFX_, think i got it.

If i had a long spreadbetting position of +100 on RR and decided to take up the rights, I would get (10/3)*100 = +333 at 32p and my original positions would remain in place too.

If I opt out, what does this mean? Do i get 333*(current_price-32)?