IIF Morgan Stanley India Rights Offer
UPDATE 7/31/2009: Just looked at my share price from the Morgan Stanley India Rights Offering (IIF). My final share price was $19.95. Doesn’t seem quite right to me. It was described that it would be 5% below the average closing price of the 5 days from 7/15-7/21. That would be an average price of about $19.88. 5% below that would be: $18.89. Was there a $1 per share cost to trade? Not sure.
I do recall that the NAV came into play as well. So, perhaps this was the reason for the pricing. Either way, I could have had the shares on the open market for the same price.
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If you area a holder of IIF (Morgan Stanley India Fund) shares, you probably received a rights offering letter from your brokerage. There has been a big of confusion regarding what the offering entitles you to. The short answer is as follows…
If you have shares, you have the right to be additional shares at a discount. The price is determined by the price of IIF on 7/21/2009 and the four trading days preceding 7/21/2009. You can buy 1 share for every 4 you currently own.
Let’s assume you have 100 shares:
You can buy 25 additional shares at a price 95% of the average closing price on the 21st and the 4 days prior
- 7/21: $19.90
- 7/20: $20.64
- 7/17: $19.63
- 7/16: $19.66
- 7/15: $19.58
Average price x .95 = your share price
I went ahead and exercised my rights.
Morgan Stanley
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