Should I trade my shares? Or maybe keeping them is the most correct strategy? These are some of the questions asked by many shareholders, like you, who still have their savings invested in the sustainable development company Abengoa. As a result of your application to enter the bankruptcy process after going through serious economic problems in recent years. Not surprisingly, the company figures its total consolidated gross debt at 8,903 million euros.
The effects of this measure have not taken long to reach the financial markets, with the consequent repercussions on small shareholders. On the one hand, it is no longer listed on the Ibex 35, the selective index of the Spanish Stock Exchange. And on the other, the most important thing if it took positions in the value, with the collapse of its price, with a fall of the 78% in its value on the stock market, in terms of prices prior to the issuance of the statement issued. to the National Securities Market Commission (CNMV). To date, it is trading at 0.292 euros.
In three days it has lost practically three-quarters of its valuation on the stock marketand with a large volume of traded securities, which means that investors are rapidly undoing their positions. Before the news broke, the stock was trading at 0.916 euros per share, 50% less than its price at the end of last year.
Generating, whatever the case, large fluctuations in their prices, with depreciations around 30% in the same trading session, and with equally notable increases that detected the serious uncertainties that the Andalusian company was going through with respect to its financing.
In practice, if you entered at the end of October with an operation valued at 10,000 euros, you will see how in just a few days your capital has been reduced to only 3,292 euros approximately.
Effects between investors
In the previous weeks, the main stock market analysts recommended not to have access to this value in any way. In spite of everything, it is possible that you have ignored them, hoping to obtain splendid benefits from your contributions taking advantage of their low prices. Well, it has not been like that, but you will see how your titles continue to collapse on the Madrid parquet.
However, there are still many uncertainties that invade you today. To begin, you must remind yourself that continues to trade on the stock market, after a temporary suspension of their titles. Even if at a much lower price as a result of the important decision of the company.
In this scenario, it will be very useful to know the appropriate strategy to protect your money. If you sell the shares at market price, or on the contrary, stay with the desire that they generate important rallies that will make you recover part of your contributions. And taking advantage of the situation, if you have no shares, you may be tempted to open positions with a viable solution to the problem.
Scenarios that arise
For the moment, all opportunities remain open, including a positive solution, as a result of the entry of a business group, even with government aid, as suggested by certain economic and political sectors of the country.
Whatever the case, they should now analyze the different scenarios that may arise from this exceptional situation. The time has come for you to start a strategy, not without many complications, which is intended to protect your interests as a shareholder.
- Suspension of listing: It would be the worst viable scenario if you have open positions in the company, since your shares would immediately stop trading on the stock market. And as a result, their securities could not be traded until the measure was lifted. It could last a long time, even with the opportunity to never do it. The most immediate effect is that you would be trapped without being able to do anything, no more no less. At the same time, you would have to face the custody expenses that your bank will apply to you for the administration of the securities. It will represent an amount of 0.10% over the amount of the operation.
- Shares continue to trade: no less worrying would be this scenario that is presented, even when you can at least exercise your put option in the markets. As expected, with new and strong depreciations in their prices. The closing of the positions could lead you to bear losses between 60% and 90%, in terms of your buy orders.
- Entry of new investors: It cannot be ruled out that some economic group, investment fund, and even with the help of the Spanish government, the company may re-float, or at least have a share capital to continue operating in its professional activity. To this end, there is still a window of time for this scenario to be completed. You will have up to four months to negotiate a solution with your main creditors. In which case, the rises would return, even though it is not known if with the same intensity as in the previous movements. A first consequence would be that many investors would take positions taking advantage of its low prices.
How can you fix the problem?
The strategies you can develop will be very limited, as a consequence of the severity of this unusual business scenario. There will be no choice but to verify your personal financial situation to calibrate, up to what level of losses can you take, or on the contrary, if it will be worth waiting a long time for the situation to normalize. Whatever the case, if you do not intend to remain trapped in a viable and definitive suspension of your listing, you will only have two alternatives to turn to:
- Formalize the sale: you will have no other solution than to acknowledge your error and definitively complete the operation. Assuming you will do it with severe disabilities.. But at least you won't lose all of your invested capital. You can even rush this strategy by trying to look for possible rallies in its price that give a greater margin to the settlement of the operation.
- Hold positions: It is still a risky maneuver depending on the final outcome of the conflict. On the positive side, you can gradually recover your prices. But from the other perspective, make you lose all your savings if there is no solution to the problem, and the company is definitely going bankrupt. In which case, it would be at the bottom of the list to recover contributions.
