Is it worth going in to the STO (Santos) capital raising. I have a few weeks to decide. There seems to be those who say go for it and other commentators not so sure. We can get up to $15K but I already have a book loss of the ones I currently own. Your thoughts?
A: Thanks for the question.
Santos is quite leveraged to the oil price, so participating in the offer is really a play on the direction of oil prices.
The SPP is no bargain – either the lesser of $4.06 or 2% below the weighted average trading price on the ASX in the week of 24 Jan to 31 Jan. Current price is around $4.12.
It is due to close ion 31 Jan.
As far as the brokers are concerned, sentiment on Santos is positive, target price is $4.76.
I am indifferent – probably lean to passing on this offer.
