What should I do with GREG:W2 friends?

dcwal · 1 What should I do with GREG:W2 friends? Thu Feb 02, 2012 8:35 pm

dcwal

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I have 4000 QTY @ 19/20...
IS IT WORTH TO BUY ANOTHER 4000 GREG.W2 AT 1/50 AND AVG TO HOLD?????...
PLS ADVICE ME...

rijayasooriya · 2 Re: What should I do with GREG:W2 friends? Thu Feb 02, 2012 8:42 pm

rijayasooriya

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U have to pay Rs33/= for one warrant to convert.
Most probably u might be able to buy additional shares at price of Rs33/- when u will convert ur warrants at the same time please note that GREG.N0000 is around Rs26/- now.

TortoizePlus · 3 Re: What should I do with GREG:W2 friends? Thu Feb 02, 2012 9:59 pm

TortoizePlus

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Let me use simple mathematics.

Suppose you bought another 4000 tomorrow.

Then your average cost is
((19.20 * 4000) + (1.50 * 4000))/8000 = 10.35

For the breakeven, GREG should be 33+10.35 = 43.35 by 2013 September without considering the opportunity cost.

The possibility for achieving GREG price to 43.35 is higher than achieving 52.2 target. (19.20+33).

That is one plus point in averaging.

But, you need additional 132000 (33*4000) for converting to shares by 2013. Altogether you need 264000 for converting warrants to GREG. So do you have that amount?

What happen if it didn’t appreciate to your breakeven? Are you going to convert your warrants?
Say you are not going to convert..

If you have not average down, you will lose 76800 of your capital. If you averaged then you will loose another 6000 rupees only.

What is better… If you have enough money to convert them in 2013, I think it is better to average down now.

This is based on your luck buddy.. Don’t forget there is a HNWI who bought these W2 at 30.. So something good may happen if he still holding…

You have to take the gamble now.. because there is nothing to lose now… but don’t blame me in 2013 Very Happy

Let's see what other members say...

hariesha · 4 Re: What should I do with GREG:W2 friends? Thu Feb 02, 2012 11:12 pm

hariesha

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dcwal wrote:I have 4000 QTY @ 19/20...
IS IT WORTH TO BUY ANOTHER 4000 GREG.W2 AT 1/50 AND AVG TO HOLD?????...
PLS ADVICE ME...

1. For averaging you have spent Rs.6, 000/- now as your plan.

Total cost to average and convert: (4000*1.5)+8000*33 = 270,000.00
Current cost : 19.20*4000 = 76,800.00
Total Cost = 346,000.00
Cost/Share = 43.35

2. Without averaging you can apply for additional shares

Current cost : 19.20*4000 = 76,800.00
Total convert existing quantity : 4000*33 =132,000.00
If you can ask 8000 additional shares : 8000*33 = 264,000.00
Total Cost = 39.40

Option two is averaging at the time of conversion, which allows you to average depending on market conditions. If market condition is not favorable you can give up, but amount you save will be only Rs.6,000/. In every conversion GREG allocated additional shares to minority investors.

Roboticfx · 5 Re: What should I do with GREG:W2 friends? Thu Feb 02, 2012 11:33 pm

Roboticfx

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hmm... looks like very serious situation. Similar to a blade with 2 sharp sides.

I agree with hariesha's 2nd method! 39.40 would be a better price. Anyway it depends on your financial ability. Very Happy

Last edited by Roboticfx on Thu Feb 02, 2012 11:46 pm; edited 1 time in total

rijayasooriya · 6 Re: What should I do with GREG:W2 friends? Thu Feb 02, 2012 11:42 pm

rijayasooriya

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Roboticfx wrote:hmm... looks like very serious situation. Similar to a blade with 2 sharp sides.

Hareisha, I think your calculation contains errors. I mentioned those below. I may be wrong and you may be correct. Please comment any expert.

current cost 19.20*4000 = Rs. 76,800
additional cost for conversation 33*4000 = Rs.132,000
+ __________
Total cost after conversation Rs.208,800
+
Additional 8000 shares costs 8000*33 = Rs.264,000

Then total =Rs.472,800

472,000/8000 = Rs.59.10/=

U forget existing 4000shares.

Roboticfx · 7 Re: What should I do with GREG:W2 friends? Thu Feb 02, 2012 11:47 pm

Roboticfx

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rijayasuriya,

Thanks for showing me the problem. I highly appreciate your real time service. Keep it up! I edited my post by removing the calculation. Very Happy

dcwal · 8 Re: What should I do with GREG:W2 friends? Fri Feb 03, 2012 12:44 pm

dcwal

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thnk u all for givg valuable advices...
i decided not avg now and will apply for additional shares in 2013..
any comments???

TortoizePlus · 9 Re: What should I do with GREG:W2 friends? Fri Feb 03, 2012 1:11 pm

TortoizePlus

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dcwal wrote:thnk u all for givg valuable advices...
i decided not avg now and will apply for additional shares in 2013..
any comments???

Now you have taken a decision and there is no point in discussing this matter any further. We don’t know how many additional shares will be allocated to you (if any) by 2013. You may be able to get full amount or nothing at all. One thing we should notice that there was massive collection around 1.50 and 2.80 region and it will be nearly zero cost for those warrant holders. So, they may apply their full amount by 2013.

Anyway, now it is time to forget this Saga and focus on other shares. I wish you good luck in 2013 and hope you will be able to get out of this matter with good profit.

Cheers....