It will be interesting to see what the shareholder register looks like after the share issue.
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An interesting case. I wonder how many retail investors have the possibility to put in 44.10 SEK per old share? I suppose one can get rid of the subscription rights⊠but at what price. Usually, the bottom is seen on the day the rights issue terms are published (which is today)⊠so letâs see where we stand at the end of the day. The issue itself is backed by banks, so the recapitalization will go through regardless.
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Alright, time to put on the buying bootsâŠ
Market Cap post-money could conservatively be around 10 BSEK, with 7.5 BSEK in new cash and 2.5 BSEK for the old. Approximately 2.5 billion shares, which means 4 SEK / per share. Subscription price for the current shares is 2.45 SEK, so the difference is about 1.5 SEK per paper*19 = 30 SEK / Share today. (corrected 35 = 30)
| Post-issue equity (SEK bn) | Ex-rights price (SEK) | Rights value / old share (SEK) | Implied cum-rights price (SEK) |
|---|---|---|---|
| 7.5 | 2.92 | 8.39 | 11.31 |
| 8.0 | 3.11 | 11.74 | 14.85 |
| 8.5 | 3.31 | 15.30 | 18.61 |
| 9.0 | 3.50 | 18.86 | 22.36 |
| 9.5 | 3.70 | 22.42 | 26.12 |
| 10.0 | 3.89 | 25.98 | 29.87 |
| 10.5 | 4.09 | 29.54 | 33.63 |
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At the moment, the companyâs only option to raise capital is to force retail investors (tuulipuvut) and the few institutional investors to inject money with a gun to their heads.
In practice, current shareholders will lose all their capital if they do not participate in the offering.
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It might happen now that there will be a large number of subscription rights for sale and left on the market.
And the underwriters of the offering will be left with shares to redeemâŠ
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My patience finally ran out today. Itâs possible that Intrum will still turn things around, but my investment horizon expects returns on a different schedule than what this turnaround seems to allow for. I took a massive hit (realized a big loss), but at least I learned something again. Iâll jump back on board if the story starts writing (good) new chapters as it moves forward.
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Since that first rights issue news, just under 90 million shares have been traded on the exchange, which is about 75% of the total share capital. This suggests that a fairly large portion of those who do not want to or cannot participate in the offering have already sold their shares or part of them.
It has been clear from the start that one must inject more money at 44 SEK / share to ensure dilution is limited only to the 20% directed issue, so significant dilution has been known for a while. Of course, I was also a bit surprised that they went that low. I guessed a price of 11 SEK, meaning 4 subscription rights for every share.
The big players have already vacuumed up a large part of the entire share capital (MS and GS alone account for about 20% combined) and they would hardly be buying if they didnât intend to participate in the offering.
Of course, some subscription rights will remain floating from those who havenât monitored their portfolios or have just been left staring at the downward slideâmainly retail investors (âtuularitâ)âbut I would bet that these will also be vacuumed up quite efficiently by big money and wealthier investors.
My own guess is that the offering will be fully subscribed, and there will be nothing left for the guarantors to redeem.
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SB1 is on the same page, meaning they kept their previous 25kr recommendation in place. That was issued after the announcement of the offering and is indeed relative to the old share.
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Interesting situation. Itâs worth being prepared for the stockâs market price to drop to a theoretical value of â SEK 3.32 per share on June 10, 2026.
This is going to end up just like the Finnair rights issue, when retail investors (âtuulipuvutâ) get mixed up with these rights. Currently, the price of one right should be (0.87 SEK x 18) = 15.66 SEK
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Youâll really have to dig deep into your pockets if you intend to maintain your ownership stake and subscribe to everything youâre entitled to.
Thatâs why I think not everyone will have the cash available.
In my case, itâs 179% relative to the original investment.
Itâs a lot of money, even though Iâm only holding a tracking position now.
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Could you clarify what kind of âretail herdâ (tuulipuku) panic risk there is here? Iâm interested so that I donât mess up myself!
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Yep. A few thoughts:
- Intrum is fundamentally cheap, though the problem (as seen in the previous table or Mustakasiâs message) is that most of the value is in the subscription rights (merkkari). This means next week the share will split into the share and the right; at the current price, the share value would be 3.32 SEK and the right 15.66 SEK (provided the market values Intrum post-money at ~8.5 BSEK).
- The problem is that some of the largest owners are likely not participating in the rights issue, meaning there will probably be more rights available than buyers⊠so itâs quite possible that value will be sought from even lower levels.
- For me, the day was strange; after the initial chaos, trading in the share was quite light. There wasnât much institutional enthusiasm or short covering to be seenâwhich is what I expected. Likely, the âsmart moneyâ sees an even better opportunity to close shorts or go long later.
A tricky (and interesting) case in itself. Unfortunate for retail investors, as that 18x capital requirement will likely keep many out of the rights issue. Whatâs regrettable in the long term is that Intrum still isnât forming an owner base that would stay for the long haul; the banks guaranteeing the capital will likely exit quickly (if the rights were to hit zero, which is unlikely) much like Nordic Capital.
Perhaps the best playbook is to keep the âbuying pantsâ on but still monitor the situation. A 7.5 BSEK cap is indeed 2.92 SEK per share, so that is presumably the absolute floor for the old share, and 8.39 SEK for the rights (i.e., (~2.92-2.45)*18 = 8.39. If we go below this, Intrumâs pre-money value (i.e., current value without recapitalization) would be negative).
But letâs see how the âwindbreakersâ (retail crowd) flutter next week when the rights are detached.
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My buy finger keeps missing the button and Iâve refrained from buying.
Over the years, those write-offs tend to eat away at the attractiveness of this stock for me; even though it looks cheap, it has also become expensive to own. Someone might time it right for a good returnâŠ
That ~19% might be the minimum amount; itâs quite interesting to see how the rights issue (merkkari-anti) will go and how many shares the banks end up subscribing to. Letâs hope we donât see another institutional exit move after the lock-ups expire.
Intrum has potential, but the management certainly gave a proper slap in the face to a large number of retail investors, or provided a lesson on the risks of companies with high debt risk.
Maybe Iâll keep an eye on the rights (merkkarit) hitting the market; a large portion of my Intrum leftovers already went into other investments, and it really takes a significant amount of capital to commit to Intrumâlong-term patience (lit. sitting muscles) is required, and of course, no more setbacks for Intrum; things actually need to start working. If value creation still stalls despite this capital injection, the institutions will start pushing the stock down again, and there will be no shortage of buying opportunities.
Here is another article; NC needs its own decision on participating in the rights issue. They promise to do so once the final terms are public. In the same context, it mentions the strategy regarding the fundâs lifecycle and that it is making an exit.
The shareholder listing will likely be visible on some channel again soon; the share turnover has been high.
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That NC story is also fascinating, its own separate branch.
A 1:1:1 allocation could theoretically be a good way to approach the rights issue. A small number of shares at this stage to get the rights.
Then, you can try to complete the position by either buying subscription rights or the temporary new âdriftwood-Intrumâ shares, depending on which one gets hammered down the most.
Then in the third stage, you can finalize the position if things start looking good or if the stock gets dumped into the bargain bin.
Iâm sure many (smartly so) are watching the chaos from the sidelines and will make their decision eventually.
Since institutions seem perfectly happy to let the share price crawl at this point, they probably either need solid proof of a turnaround or they simply assume they can get it cheaper by hoarding rights / after the offering when banks dump their holdings.
One can coldly state, however, that institutions donât feel they need Intrum in their portfolios very badly. Intrum needs the institutions more, which is why that 20% âblood moneyâ is included in the rights issue.
Granted, the new Intrum has 7.5 billion less risk, but the core themes remain: will the ship actually turn and can the current management be trusted? For all we know, the guys could do another offering next year to âaccelerateâ the process, no matter how much they promise to handle things organically this time.
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| Post-issue equity (SEK bn) | Ex-rights price (SEK) | Rights value / old share (SEK) | Implied cum-rights price (SEK) |
|---|---|---|---|
| 7.5 | 2.35 | 0.61 | 2.96 |
| 8.0 | 2.50 | 3.58 | 6.08 |
| 8.5 | 2.66 | 6.56 | 9.22 |
| 9.0 | 2.82 | 9.53 | 12.35 |
| 9.5 | 2.97 | 12.50 | 15.47 |
| 10.0 | 3.13 | 15.47 | 18.60 |
| 10.5 | 3.29 | 18.44 | 21.73 |
And the most depressing part is noticing that the previous calculation was wrong, as the 612 million shares from the directed issue were missing. Here is the updated table. The market price makes much more sense today then. Letâs see where the prices drop on Wednesday. So there are almost three billion new shares (7.5 BSEK / 2.45 = approx. 3 B).
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What kind of pricing turbulence should be expected here? I didnât follow the Finnair rights issue closely, but apparently there were some good opportunities to make money there. The old share doesnât drop enough after the rights detach, or the rights are dumped via market orders and their price gets pushed too low?
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The shareholder listing has been updated, and Vist Holding dumped their Intrum shares once the news of the share issue became known; they previously held 4.8m shares (a 3.5% stake).
According to the article, Caius has also reportedly exited, although they still appear on Intrumâs website.
Nordic Capital is expected to participate in the share issue, but has not disclosed to what extent.
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