Should I sell my shares? Or maybe keeping them is the most correct strategy? These are some of the questions posed by the many shareholders, such as your case, who still have their savings invested in the sustainable development company Abengoa. As a consequence of your application to enter the bankruptcy proceedings after going through serious financial problems in recent years. Not surprisingly, the company figures its total consolidated gross debt at 8.903 million euros.
The effects of such a measure have not taken long to reach the financial markets, with the consequent repercussions on the small shareholders. On the one hand, it has ceased to be listed on the Ibex 35, the selective index of the Spanish stock market. And on the other, the most important if you have taken positions in the value, with the collapse in its price, with a 78% drop in its value on the stock market, with respect to the prices prior to the issuance of the statement issued to the National Commission of the Stock Market (CNMV). Until currently trading at 0,292 euros.
In three days it has lost practically three-quarters of its valuation on the stock market, and with a large volume of traded securities, which means that investors are shedding their positions quickly. Before the news broke, the stock was trading at 0,916 euros per share, down 50% from its price at the end of last year.
Generating, in any case, large fluctuations in their prices, with depreciations of around 30% in the same trading session, and with equally notable increases that detected the serious uncertainties that the Andalusian company was going through in terms of its financing.
In practice, if you have 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 among investors
In the previous weeks, the main stock market analysts recommended not to enter this value in any way. In spite of everything, you may have ignored them, hoping to get splendid benefits from your contributions by 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 at this time. To begin with, you have to remind yourself that continues to trade on the stock market, after a temporary suspension of their titles. Although at a much lower price as a result of the important decision of the company.
Faced with 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, keep them with the desire that they generate important rallies that 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 possible solution to the problem.
Scenarios that arise
For the moment, all possibilities remain open, including a positive solution, as a result of the entry of a business group, even with aid from the government, as suggested by certain economic and political sectors of the country.
In any case, they will have to analyze from now on 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 possible scenario if you have open positions in the company, since your shares would immediately stop trading on the stock market. And as a consequence, you could not sell their securities until a lift of the measure. It could last a long time, even with the possibility of never doing it. The most immediate effect is that you would be trapped without being able to do anything, no more no less. In addition, you would have to face the custody expenses that your bank will apply to you for the management of the securities. It will represent an amount of 0,10% on the amount of the operation.
- Stocks continue to trade: no less worrisome would be this scenario that is posed to you, although at least you can exercise your put option in the markets. Predictably with new and sharp depreciations in their prices. The closing of the positions could lead you to bear losses between 60% and 90%, with respect to your purchase orders.
- Entry of new investors: You cannot rule out that some economic group, investment fund, and even with the help of the Spanish government, the company may refloat, or at least have a share capital to continue operating in its professional activity. In this sense, there is still a margin 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 again, even though it is unknown if with the same intensity as in the previous movements. A first consequence would be that many investors would take positions taking advantage of their low prices.
How can you solve 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 check your personal financial situation to calibrate, up to what level of losses can you assume, or on the contrary, if it will be worth waiting a long time for the situation to normalize. In any case, if you don't want to be trapped in a possible 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 mistake and finalize the operation definitively. Assuming that you will perform it with extensive disabilities. But at least you won't lose all the invested capital. You can even rush this strategy by trying to look for possible rallies in its price that give more margin to the settlement of the operation.
- Hold positions: It is still a risky maneuver depending on the final outcome of the conflict. As a positive aspect, you can gradually recover their prices. But from the other perspective, make you lose all your savings if there is no solution to the problem, and the company definitely goes to bankruptcy. In which case, you would be at the bottom of the list to retrieve contributions.