Share Purchase Plans

[Fleeta]

Hey guys,

Whats your opinion on supporting share purchase plans? I always thought it was a sign of weakness if a company was asking for more money from you, unless it was to fund a good acquisition.

In the past week, 2 of the shares I hold have announced SPPs to pay off debt (HUG and CBD). Both are in a 'declining trend' and I am relunctant to participate. However, given the discounts offered, it may be worth it.

The last 2 SPPs I participated in were PSI and SPC. Both companies were taken over within 6 months of the SPP and at significant premiums (>50%) to the SPP price.

Anyone got any horror stories about SPPs or anyone who doesn't support them?

 

[baglimit]

Of course the FXJ SPP from a year or 2 ago has been a raging success - to fund the NZ purchase - $2.77 was the asking price, when the shares were at about $3 - at current levels of +$4.50, it has been a nice little earner, especially with increased divs pumped into the DRP.