Meyer Burger (MBTN vs. MBTN1)

Investing / Others
1

Hello :wave:

I haven’t quite understood what Meyer Burger and the purchase rights are all about and thought I might start a thread here as I couldn’t find anything on this subject in this forum. I have MBTN shares. Since today, “MBTN1” shares have appeared automatically in my trading account. This means that I now have the same number of MBTN and MBTN1 shares in my trading Account. My question now is:

I read somewhere that MBTN1 is only traded temporarily. Does this mean that I should sell it?

Or will MBTN1 remain?

(Don’t worry, it’s just little play money I’m trying to learn with)

2

According to Bloomberg MBTN1 are tradable rights. They were announced on the 18th of March and issued as a corporate action to holders of MBTN today. They will expire on the 27th of March.

I believe this is related to their recently announced Kapitalerhöhung (issuance of new stock, see also a recent news article on this in the NZZ).

Based on this press release I’m guessing MBTN1 is the right that allows you (as an rights holder) to buy 28 newly issued MBTN stocks for every 5 rights at a certain price (CHF 0.01 if I read their press release correctly).

(Personally, I don’t think there is much to learn from this type of investing … YMMV, of course.
Anyway, good luck with this.)

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3

I find it concerning that you invest in individual companies without the ability to read or find the informations about a basic capital increase.

You basically own shares in a (shitty?) company that need money from investors to continue to operate.

  1. Do you want to give money to the company to continue owning the same percentage of the company (The company will be the same, except it will have more money of its bank account…for now) Then you can exercise your right before the deadline.

  2. Do you want NOT to give them money ? Then you can sell your rights (MBTN1) before the deadline or let them expire without compensation. The theorical value per right is 28/5 x (Price of the share -0.01). If you do that, your share of the company, and therefore your share of futur profits (if any…) will decrease.

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4

Thank you for your answers! I found the media release from Meyer Burger more understandable than the stock exchange news within the broker (perhaps also because of your summary, thanks!).

I have now understood it as follows:

  • Meyer Burger need money to continue to exist (and to move to the USA)
  • A capital increase is carried out so that more money is available
  • For this purpose new shares will be issued
  • Existing shareholders receive a purchase rights
  • MBTN1 represents this purchase right

Means for me:

  • I can now make use of my right, or I can sell the right
  • But I should do something, nothing would be a bad deal
5

Btw, at the current prices, it makes sense to sell MBTN and buy the corresponding amount of MBTN1 that would lead to the same number of shares (taking into account the additional 0.01 CHF per share that will need to be paid)… But feel free to do your own calculations.

6

I don’t know exactly if the price for new shares is already fixed, probably not, but rights to buy new shares do not become new shares. You still need to buy them. Otherwise it would be an arbitrage opportunity.

7

The price is 0.01 CHF

8

And… it’s gone !

It is my understanding that with the 1:750 reverse split, even the price of the newly issued shares at 0.01 CHF have been divided by 4

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