Tag Archives: Share price

Citi-Split May Trigger Margin Calls

According to a market statement, Citigroup will have a reverse stock split effective after the close of trading on May 6, 2011, and Citigroup’s common stock will begin trading on a split adjusted basis on the New York Stock Exchange at the opening of trading on Monday morning. If you’re in the market you should check your mailbox.

If a corporate action materializes, the client accepts that FxPro reserves the right to make appropriate adjustments to the value and/or the size of a transaction and/or number of any related transactions.

FxPro Financial Services


Although I’m not trading, I receive many of the same alert that ordinary investors do. This morning I got a warning of a possible margin call from the online broker FxPro Financial Services.

The following statement was issued Friday afternoon through the usual market information channels:

Please note that Citigroup Inc. (NYSE: C) will have a reverse stock split which will be effective after the close of trading on May 6, 2011, and that Citigroup Inc. common stock will begin trading on a split adjusted basis on the New York Stock Exchange (NYSE) at the opening of trading on May 9, 2011. When the reverse stock split becomes effective, every (10) ten shares of issued and outstanding Citigroup common stock will be automatically combined into (1) one issued and outstanding share of common stock without any change in the par value per share.

The following small print message was also attached:

Note: A reverse stock split reduces the number of shares in the market and increases the share price proportionately. For example in a 1:10 reverse stock split the number of shares in the market is reduced by 10 times and stock price increases by 10 times (although the opening price after a reverse split may have a deviation from this price).

The result of a maneuver like this is a reduction in the number of a corporation’s shares outstanding that increases the par value of its stock, or its earnings per share.
The market value of the total number of shares (market capitalization) remains the same.
For example, a 1-for-2 reverse split means you get half as many shares, but at twice the price.
It’s usually a bad sign if a company is forced to reverse split – firms do it to make their stock look more valuable when, in fact, nothing has changed.
A company may also do a reverse split to avoid being delisted.
Thou, I can’t really imagine Citigroup being delisted on NYSE – that would really stir the pot, I guess…
A 17 percent plunge in the Citigroup share price last Friday triggered a five-minute trading pause.
It also triggered at debate about the three-week old curcit=braker system that’s been implemented.
Whether the drop in Citigroup’s market value was justified or not, didn’t seem to bother anyone…
Anyway –  this morning I received the following notice from the online broker FxPro:
FxPro Terms and Conditions (CORPORATE ACTIONS 8.1):

If a corporate action materializes, the client accepts that FxPro reserves the right to make appropriate adjustments to the value and/ or the size of a transaction and/ or number of any related transactions; any such adjustment aims in preserving the economic equivalent of the rights and obligations of both the client and the Firm immediately prior to a corporate action. It should be noted that these adjustments are conclusive and binding upon the client; the client will be informed accordingly by the Firm as soon as reasonably practicable.

Thank you for your collaboration.

Sincerely yours,
Dealing Desk,
FxPro Financial Services Ltd.

Well, it doesn’t matter much to me, but I guess if you’re in the market, either directly as an investor in Citigroup, or indirectly by EFT‘s, CFD’s or other derivatives, you should check your mailbox immediately to avoid any nasty surprises on Monday morning.


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A Helluva Ride

This one of those great  days when I get the opportunity to say; I told you so. The Norwegian solar company REC, who yesterday claimed a new groundbreaking technology at the U.S. Moses Lake plant, got a helluva ride at Oslo Stock Exchange Wednesday. Someone even throve in a law suit.

“The existing plant has a recurrent history of violations of licenses, chemical spills, fires and accidents.”

Victor C. Jansen


After jumping more than 8% in the last minute of trading, Tuesday, the  REC shares continued to rally when the stock market opened in Oslo Wednesday morning. But only for a few minutes more. Then the share price nose dived, and a group called  “RECisExceptional” announced that they’re filing a law suit against the company.

As I wrote in yesterdays comment: “This can go either way, and the move can be big.”

REC went from NOK 23,6 to NOK 25,6 yesterday, gained another few percent Wednesday morning, before it turned down to 23,6 again and finally ended with a loss of 7,24% at NOK 23,81.

That’s a spread in the neighborhood of 20% – and the kind off moves that makes money.

I would not be surprised if a few day traders popped a bottle of champagne tonight.

REC obviously failed to impress the analysts with its grand announcement Tuesday afternoon.

They’re still worried about the companies fast growing debt, and still no reassuring prospect of future income.

But to make the day even more entertaining, a group that calls themself “RECisExeptional” made a public statement that says they are filing a law suit against the company.  The U.S. company REC Silicon, that is.

The lawsuit has been submitted to the District Court of Spokane, the Puget Sound Business Journal report.

The group, led by real estate investor Victor C. Jansen, believes that the existing plant has a recurrent history of violations of licenses, chemical spills, fires and accidents.”

In addition, Jansen says that the expansion has been approved without environmental permits.

The group want to halt RECs expansion.

Related by the Econotwist:

Norwegian REC Claim Ground-Breaking Technology

Follow the stock here.

Check out the option action for tomorrow here.

Here’s some of the market presentation material.

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Yara Sign Cash Merger Agreement With Terra

Norwegian Yara International ASA has signed a cash merger agreement with American Terra Industries Inc. at a price of USD 41.10 per share, representing a market capitalization of Terra of USD 4.1 billion. The transaction will give Yara an improved position in the US, and is planned to be supported by a Yara rights issue of USD 2.0 – 2.5 billion, according to Oslo Stock Exchange.

“Yara is committed to the US market, and this transaction presents an attractive opportunity for both companies to strengthen their positions in the US.”

Jørgen Ole Haslestad

The worlds largest fertilizer producer, Norwegian Yara International ASA, has signed a cash merger agreement with Terra Industries Inc. at a price of USD 41.10 per Terra share, representing a market capitalization of Terra of USD 4.1 billion, Oslo Stock Exchange says.

The transaction will give Yara an improved position in the US, and is planned to be supported by a Yara rights issue of USD 2.0 – 2.5 billion. The agreed Terra share price of USD 41.10 represents a premium of 23.6% above the closing price on 12 February 2010.

“Yara is committed to the US market, and this transaction presents an attractive opportunity for both companies to strengthen their positions in the US. Yara and Terra are a perfect fit, and the combination will elevate Yara to a truly global leader in the industry. Both companies are strong in ammonia and nitrates, and have complementary geographical footprints. Terra’s ammonia and upgraded fertilizer distribution system in the US will be combined with Yara’s global sourcing and optimization capabilities as the world’s largest producer and trader of fertilizer and ammonia”, Jørgen Ole Haslestad, President and CEO of Yara International ASA. says in a statement.

“We have signed the merger agreement on the basis of Yara’s proven M&A value creating track record, a positive fertilizer market outlook and the improved competitive edge of US nitrogen producers. The structural changes over the last years in the global and US gas market with ample LNG and shale gas have strongly improved the US producers cost position. North American producers are in addition benefiting from logistical advantages as the US will continue to need large imports of nitrogen, and the high construction costs for new plants now favor existing production capacity”, says Jørgen Ole Haslestad.

Yara has identified yearly cost synergies with pre-tax effects of USD 60 million to be harvested within a year after closing. In addition, Yara is targeting soft synergies of the same magnitude, including improved utilization and optimization of logistical systems.

Terra has delivered an average annual adjusted EBITDA of USD 613 million over the last three years ending September 2009. The estimated enterprise value of USD 4.3 billion corresponds to an EBITDA multiple of 7.0 before synergies and 5.9 after synergies.

Here’s s the full market statement.

Reports better than expected Q4 figures

Yara International ASA also reports improving results as margins expand from third quarter, Monday. Volumes were stable but demand and prices improved strongly at the end of the quarter, according to the company.

Yara reports fourth-quarter net income after non-controlling interests of NOK 1,424 million (NOK 4.93 per share), compared with a negative NOK 2,109 million last year (NOK 7.27 per share).

Excluding net foreign exchange losses and special items, the result was NOK 4.35 per share, compared with a negative NOK 0.10 per share in fourth-quarter 2008.

EBITDA for the quarter was NOK 1,394 million compared with 1,626 in fourth quarter 2008. Yara’s board will propose to the Annual General Meeting a dividend payment of NOK 4.50 per share for 2009.

“Our underlying fourth-quarter results were non-satisfactory. Global NPK sales continued to be hampered by high potash prices, and until November European nitrate prices were held back by European distrib­utors still unwilling to take positions for the spring application,” Jørgen Ole Haslestad, President and Chief Executive Officer of Yara. says.

Full statement.

Stocks Tumbling

The share price of Yara (YAR)is tumbling down 5,6% at Oslo Stock Exchange Monday, while the benchmark index is up 0,15%.

Related by the Econotwist:

Analysts Lost In (Norwegian) Woods

The Northern Lights (And Dark)

How To Make A Rat Look Like A Puppy

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