Trading in Air New Zealand's rights offer shares begins today after several days of its existing stock price bouncing around. 

Yesterday the airline's share price for the ordinary shares increased 4.5c or 4.97 per cent to 95c, and the rights raced to 75c, up 26c or 53.06 per cent and well ahead of the reference price of 49c. 

Air New Zealand is raising $1.2 billion from investors to help fuel its recovery from the pandemic. 

Harbour Asset Management portfolio manager Shane Solly said there has been some unusual pricing. 

"Maybe there is an opportunity for some people to trade the stock and take advantage of the differential price. (Today) is an important day when we will get real trading going on in the rights." 

The Air New Zealand share register for the two for one renounce able rights offer has now closed and shareholders will know exactly how many rights they can trade. 

The NZX released a statement, pointing out that each Air New Zealand right represents an entitlement to subscribe for two new ordinary shares (at 53c a share) in the airline. A total of 1.122 billion rights have been issued and when exercised will result in the issue of 2.246b new shares. 

Solly said shareholders have to remember they are paying and having to fund 53c times two (therefore $1.06) for the new shares in Air New Zealand. 

Shareholders needed to have shares in Air New Zealand the close of trading on Friday. 

Owners have the right to buy two new shares at 53c a share. That was a 62 per cent discount on the $1.37 shares closed at before the announcement was made on Wednesday evening. 

About 2.3 billion new Air New Zealand shares will be issued under the offer, which has caused confusion among some investors. 

On Monday the company twice went into a trading halt as the NZX rectified the calculation of the limited rights reference price – from an initial 24.5c to 49c. The price adjustment reflected the correct ratio of one limited rights being exercised for two new Air New Zealand shares. 

Matt Goodson, managing director of Salt Funds Management, described that as a strange day with shares trading as high as $1.07. 

"It's quite an unusual offer from Air New Zealand with one right allowing investors to bid for two shares, not one, in the airline. I think people don't quite understand that when the stock goes ex-rights they are buying something that will finish up having three times more shares on issue. 

"The shares are also traded heavily in Australia but there's no rights trading there – only in New Zealand. It's all a bit bizarre. Air New Zealand's current share price is well north of most analysts' estimates, and there clearly has been some misunderstanding." 

A rights issue is one way they can raise cash by selling more shares. It's seen as quite a fair way for retail investors. 

But investors face plenty of risks to weigh up, Sharesies chief executive Leighton Roberts said in a Continuous Disclosure podcast today: 

"There are lots of things investors might think about when deciding to invest and some of these are relevant to any company. 

"They include the price of the shares versus what someone thinks they are worth and someone's time horizon." 

Roberts says Air New Zealand has made it clear it won't be cashflow-positive for a while so it's going to be a long-term investment. 

He says investors need to get clued up on what the company plans to do with the money while considering its track record and the risks of it being able to deliver on its plans in the future.