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A company I was holding recently did a Rights Issue, giving me an extra x amount of shares in a new line from the main shares at a lower price. After reading http://www.investopedia.com/articles/stocks/05/062905.asp I decided to sit on these new shares as it was my understanding that these would be merged back into the main line at some point and then the final price of the merged line would be somewhere in between

Checking my broker account this morning I found that the new line shares have disappeared into my 'Inactive portfolio' where things I used to hold are recorded, however I still have the same amount of main line shares; it seems like the new line has just been deleted and not actually merged back

Did I misunderstand the situation, and was I supposed to sell these new shares (if so, who would buy these considering they disappear after a short amount of time?)? Am I just being jumpy and the new shares will turn up in my account eventually? Was I supposed to manually request the merge take place or something?

Neil
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Madden
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1 Answers1

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A company I was holding recently did a Rights Issue, giving me an extra x amount of shares in a new line from the main shares at a lower price

Did you participate in the Rights issue and purchased the extra shares by paying the x amount? Rights Issues have to be exercised and are not granted by default.

The Right to buy can be transferred to someone else for a consideration or free.

however I still have the same amount of main line shares; it seems like the new line has just been deleted and not actually merged back

My guess is the shares were visible for you to exercise the option to buy them, or trade your rights. If you haven't done any of these, it expired.

Am I just being jumpy and the new shares will turn up in my account eventually?

If you have purchased the Rights issue, then it could be transition and the actual shares would start showing up.

Dheer
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