I do not get what affect if any the reduced par value and reduced share capitalization has. Will that affect market price?
Seems to me that only RS is a big negative. I still think they are setting this up for SDRL to buy fewer shares with SDRL shares- probably also at 1 for 10- like one $6 SDRL share for 10 NADL shares at 55 cents and tell you that you got a great deal by only paying $5.50 for the SDRL share after they wipe out 90% of NADL shareholder value. And the SDRL shares falls to $3 in 6 months. Whoopee! What a deal. Thanks for that JF.
Since selling NADL now only recovers 6% of my cost, I will hold through this. I prefer my cost gets rolled into SDRL over the tax loss that I do not need- against a chance that my remaining 6% gets wiped out by other moves like BK.
My NADL cost rolled into SDRL gives me a very high unit cost for just a few shares. When SDRL hits a bottom, I can buy about 2/3 more SDRL shares pretty cheap and return close to my current SDRL cost.
After that I have to consider if/when SDRL is good enough but still cheap enough to add more or just hold for the many years it takes to recover when the oil price gets high enough.
Unlike many other investors, avoiding tax losses is one of my goals.
It is lie that RS is to continue listing for a penny stock with a bad future on NYSE. The RS is to destroy shareholder value so SDRL can buy with SDRL shares for cheap.
After 1 for 10 RS, share price will drop 90% back to 55 cents (when you have 90% less shares) and that will destroy shareholder value by 90%. That will probably take up to 6 months.
Then SDRL can exchange 1 SDRL share for 10 NADL shares to acquire the shares of NADL they do not own.
They will tell NADL shareholders they got a great deal- relative to current share prices.
That is how they (Fredriksen) screw the shareholders.