The previously announced new issue of BAM 4.75% Perpetuals started trading today under the symbol BAM.PR.N … and I can’t believe my eyes!
I was expecting it to trade in the $24.50 area, simply because that’s where the BAM.PR.M issue promptly slumped to immediately after the new issue was announced … the price level is not a surprise.
The surprise is that it’s now 1:30 pm, only 5,500 shares have traded, and the market is quoted at 24.60-64, 3×7. 3×7? On a new issue? 5,500 shares?
Together with the drop in price being so pre-ordained by the behaviour of BAM.PR.M, what this is telling me is that the underwriters haven’t sold a whole lot of shares. I can’t state that as a definite fact and I’m not the Oracle of Delphi, but that’s my interpretation and I’ll bet anybody who likes an entire dime that I’m right.
I suspect that this one will have an Inventory Blow-Out Sale, just like SLF.PR.D did last fall. Maybe early June, but I won’t bet any money on that part of the prediction. In the mean-time, I urge extreme caution when buying both BAM.PR.N and its twin sister BAM.PR.M … at least until the situation clarifies.
The HIMIPref™ database has been updated with the new issue information – BAM.PR.N has been assigned the securityCode A41223, replacing the preIssue code of P43000. A reorgDataEntry has been processed to reflect the change.
Update: Closed at 24.50-60, 3×19, on volume of 9,400 in a trading range of 24.50-75.
At some point, I’m going to do some research on “First Trading Days”. This must be some kind of record.
tick … tick … tick …
Update: This issue has been added to the PerpetualDiscount Index.
BAM.PR.N : A Ticking Time-Bomb?
Wednesday, May 9th, 2007The previously announced new issue of BAM 4.75% Perpetuals started trading today under the symbol BAM.PR.N … and I can’t believe my eyes!
I was expecting it to trade in the $24.50 area, simply because that’s where the BAM.PR.M issue promptly slumped to immediately after the new issue was announced … the price level is not a surprise.
The surprise is that it’s now 1:30 pm, only 5,500 shares have traded, and the market is quoted at 24.60-64, 3×7. 3×7? On a new issue? 5,500 shares?
Together with the drop in price being so pre-ordained by the behaviour of BAM.PR.M, what this is telling me is that the underwriters haven’t sold a whole lot of shares. I can’t state that as a definite fact and I’m not the Oracle of Delphi, but that’s my interpretation and I’ll bet anybody who likes an entire dime that I’m right.
I suspect that this one will have an Inventory Blow-Out Sale, just like SLF.PR.D did last fall. Maybe early June, but I won’t bet any money on that part of the prediction. In the mean-time, I urge extreme caution when buying both BAM.PR.N and its twin sister BAM.PR.M … at least until the situation clarifies.
The HIMIPref™ database has been updated with the new issue information – BAM.PR.N has been assigned the securityCode A41223, replacing the preIssue code of P43000. A reorgDataEntry has been processed to reflect the change.
Update: Closed at 24.50-60, 3×19, on volume of 9,400 in a trading range of 24.50-75.
At some point, I’m going to do some research on “First Trading Days”. This must be some kind of record.
tick … tick … tick …
Update: This issue has been added to the PerpetualDiscount Index.
Posted in Data Changes, Index Construction / Reporting, Issue Comments | 10 Comments »