02 June 2015

Boustead Project - Is this multi-bagger for real?

Boustead is one of the key players on my team of dividends stock. Recently on 24 Apr 2015, it spawned off a new player called Boustead Projects by introducing this stock on the SGX issued like a dividend from Boustead. Believe the technical term is "distribution of shares in specie". So it's a new specie! Hah.


As a result, I'm now a shareholder of Boustead Projects as well. The new units were issued at a value of 15.47 cents per share (Boustead Investor Central - Dividend History). Fascinatingly, its value seems to be at 90 cents now (as on 29 May 2015). It's dropping though.

That's 5.8 times its starting value (a 5-bagger), or a return of 482%! What gives?

Will it drop back to its starting value? Or is this where it should be valued at?

[Updated 7 Jun 2015]

As Raymond K subsequently shared, the distribution in specie was 3 shares of Boustead Project for 10 shares of Boustead. So, each share of Boustead Projects should in fact be valued at $0.516. So it's not a 5-bagger, but is closer to being a 2-bagger.

4 comments:

Anonymous said...

I think you didn't consider the 3 by 10 ratio?

Lizardo said...

Anon,

You're referring to 3 for 10 from Boustead? Not sure how that relates to Boustead Project's jump in price though. Believe Boustead itself didn't drop by the equivalent price.

RK said...

Boustead share should drop by 15.5 cents XD, and Boustead Projects new shares have NAV of around $0.515 based on 3 for 10 entitlement

Lizardo said...

Raymond K,

Thanks for highlighting. It's still quite a climb.