XOM VOLUME WEIGHTED AVERAGE PRICE

[Kaliboo]

I generated this Excel chart to provide an idea as to what the number will be to determine how many shares of XOM we will get for our $45 per IOC share.    It looks encouraging for IOC shareholders.

The buyout agreement talks of the volume weighted average price for 10 consecutive days running up to and including the 2nd day before the closing date.  Some think the closing date will be Sept 27.  If so, then the calculation for this number should run from Sept 12 to Sept 23 (10 trading days).

I've plotted two volume weighted average price curves below.  The green curve is a rolling 10 day volume weighted average price.  So this simply shows how the 10 day average is trending.

The blue curve is another volume weighted average price curve but cumulates the data beginning with data starting on Sept 12.  So if in fact this deal closes on Sept 27, then the value in this curve on the close of Sept 23 will be the XOM pps value they actually use (if calculated using closing prices).  And that value will match the Green curve on that date.

The good thing is XOM pps has been trending lower and the volume has been trending higher.  The curves continued to trend downward, even though XOM closed up 1% today.  That's the benefit of volume weighted multiday averages.

All we need is a large black swan day to knock XOM down 20% and volume up 100+% to really improve our deal.

The bad news for XOM recently with the SEC and now with analysts downgrading the outlook, which seems to be snowballing negatively, is to our advantage if it continues.  XOM was up only 0.92% today while CVX was up 1.98%, TOT up 2.01% and RDS-A up 2.00%.

[AU74]

If there are any sharp price movements at this point, could XOM manipulate the closing date to their advantage?

[Kaliboo]

If there are any sharp price movements at this point, could XOM manipulate the closing date to their advantage?

.

Where are the shorts when you really need em?

[AU74]

Looks like the weighted average price for the ten days ending today will be about $84.20, about $0.75 above the current price. In other words, we would be starting with a .75 loss right off the bat.

[Kaliboo]

Looks like the weighted average price for the ten days ending today will be about $84.20, about $0.75 above the current price. In other words, we would be starting with a .75 loss right off the bat.

That's one way to look at it.  I think the idea of using a 10 consecutive trading day volume weighted average price is a fair way to  do it.  I've updated the sheet to reflect Friday's close as the 10th consecutive trading day.  The exact result is $84.16.  True that is higher than Friday's close of $83.45.  But you have to look at this the correct way.  Using the updated spreadsheet you can see that by both approaches (which arrive at the same end point on Friday's close), the average price is continually decreasing every trading day during the 10 day period.  The first of the 10 trading days, the stock closed at $87.29.  The last 10 trading days in reverse order are below and in the Excel file.  To have the average volume weighted price decline 10 consecutive days, is in my opinion, pretty lucky.  If XOM stock had been climbing we'd be getting a lot fewer shares.

83.45
83.54
83.30
82.54
83.83
84.03
85.08
84.60
85.21
87.29

[Stavros]

If the original deal with Oil Search had gone through, the current value of 8.05 shares of OSH stock = US$39.68.

So we be doin' better with XOM shares that are tradable by US-based shareholders and pay ~3.6% Dividend.

[Kaliboo]

If the original deal with Oil Search had gone through, the current value of 8.05 shares of OSH stock = US$39.68. So we be doin' better with XOM shares that are tradable by US-based shareholders and pay ~3.6% Dividend.

Thanks Stavros.  For many things are not great, but they could be a lot worse indeed.

[Kaliboo]

Update:  Well unfortunately thanks to the Arabs and Persians driving oil stock prices up today, we may soon be at risk of getting less shares of XOM.  Today as you know XOM rose 4.4%; more than Shell, Chevron or Total.  To make matters worse, volume skyrocketed to 27.2 million shares; more than 2X the 3 month average.

But the 10 day moving volume weighted average at today's close has only risen back to where it was on Friday, Sept 23.  If the deal closes today or tomorrow, then this upward bounce will NOT be in the calculation.  The 10 day calculation period ends 2 days before (and not including) the closing date.

Here again is the updated 10 day volume weighted moving average.  If they close today Sept 28, then we get the price on Sept 26.  Let's hope it is closed no later than Sept 29 which would give us the most XOM shares.  After that it is costing us.

This explains why IOC PPS is going up.  Right now for each share of XOM you receive, you are getting a value in market premium due to the mechanics of the payment calculation and time period.

So if the deal closes on Sept 27 (the best day to close for shareholders), then we have gained 68 cents per IOC share of market value in the XOM shares we will receive if the price holds at 84.90 when we receive them.

We are waiting on the court according to the news release.  And I think it is safe to assume that Phil's objection has SLOWED DOWN THE PROCESS and may delay the closing date which could cost us money due to the price averaging effect and rising XOM pps.  Thanks again Phil!

10 day rolling volume weighted average price (i.e., the PPS that will be divided into our $45.00 per IOC share to determine the number of XOM shares we receive)

$84.16	9/28/2016
$83.63	9/27/2016
$83.81	9/26/2016
$84.16	9/23/2016
$84.49	9/22/2016
$84.90	9/21/2016
$85.29	9/20/2016
$85.98	9/19/2016
$86.22	9/16/2016
$86.73	9/15/2016
$86.92	9/14/2016
$87.29	9/13/2016
$87.63	9/12/2016
$87.65	9/9/2016
$87.76	9/8/2016

[AU74]

I get it now, sorry for being so dense on the other thread.  Short of something stunning like a rejection or something that materially benefits the value of the CRPs, I hope the court just gets on with it.  If I could make $47 back immediatley selling the XOM portion from the shares I bought for ~49.50 on Friday and Tuesday, my CRP cost would be down to a very sweet ~$2.50.

[AD123]

if you plan on holding the XOM stock after receipt, i can understand you would like to get more shares.  But for those of us who plan to sell it immediately upon receipt, we receive the exact same amount of cash regardless fo the price.  Am i missing soimething?