SAAB's new stock issue is more expensive than the stock!

Rights to buy the new SAAB shares are going for 30kr now and you need 4 of them to buy a share, which will then cost 225kr. But if you are a current owner, you have these rights already. So if you sold 4 of them, you would earn 120kr, which you can then use to buy a share on the market which currently costs 340kr. Minus your earnings from your rights (340kr - 120kr), each share would cost you just 220kr. A 5kr discount per share. This doesn't make much sense for current owners.

Usually the stock price stabilises around the new emission price. I have to say SAAB shares have performed very suspiciously ever since the TX win. First it didn't go up an awful lot as one might expect, it then collapsed by a ridiculous amount after the new issue announcement, and now it is still in decline? This stock is behaving very suspiciously. One unknown that we do not know since the TX win is exactly SAAB's share of the deal and how much profit they expect to make. This may be what the smart money knows that we do not know and why SAAB AB share price is not performing very well.

I have sold half my TR's already and considering what to do with the rest.

SAAB AB just collapsed by 16% in two days. This is due to the news that SAAB will be issuing a new emission of stocks which will bring in 6 billion kronor and dilute the current stockholders by a similar amount. Nordea has reduced its anticipated price for SAAB from 500kr to 450kr. It is currently at 350kr.

SAAB apparently needs a lot of new money for growth. It is reported this is not due to winning the T-X competition, as stated in this article: SKOLFLYGPLAN. I don't believe that for a second. Of course it is because of that and understandably so. In the same article it is also implied that simply taking a conventional loan is insufficient for their needs. I also don't believe that either. With current interest rates still very low, it would be wise to increase company debt.

What I do believe is that Investor and the Wallenberg family which own almost 50% of SAAB together want to buy shares at a cheaper price. SAAB is a becoming a much larger company and more shares circulating would befit it.

Saddened that I had bought a lot more shares before this collapse. I was caught off guard by this manoeuvre but nonetheless bought more shares yesterday. I think you should too.

Boeing / SAAB T-X

Boeing / SAAB team has been selected as winners of the US Air Force T-X competition. While important for Boeing, it is more so for SAAB, putting SAAB with the big boys in military aircraft manufacturing.

SAAB AB has already gone up by 8.5% since the win. Before this, SAAB was actually in decline, seeming in anticipation of a loss. Last year, SAAB traded to a high of 453kr, it closed on Friday at 447kr. It has a dividend of 1.3% and a P/E of 37. Despite its high P/E, I believe SAAB has a lot more to gain.

The Swedish Air Force is also in need of new trainers, and will probably buy this one.

Investor AB is an investment company which owns 30% of SAAB AB. While the stock is a small portion of its portfolio (3%), it has a dividend yield of 2.8% and a P/E of 14.8 and could be an alternative to investing directly in SAAB.

I have doubled my initial position and will probably triple it next week.