Royal Mail shares

[charliebird123]

Anyone applied for any?

I've applied,not sure how many i'll get,if any.

[al**bear]

Bribery Sir A, pure bribery

800 refused the offer

[lhasa.two]

!

---

@joe_bloggs* wrote:

The latest designs for the newly privatised Royal Mail’s 1st and 2nd class stamps have been unveiled – along with the new company logo.

The compositions are meant to reflect the international flavour of the recently privatised company’s new owners:

---

You can also bet the Saudis and Qataris have bought a few shares to... they already own half of London. 

[sir_arthur_strebe-grebling]

---

@al**bear wrote:

Bribery Sir A, pure bribery

800 refused the offer

---

Yes, but it's irrelevant why they were given the shares.

Your previous point, and mine, is to wonder how many will remain as investors and how many will cash in on their profits (spivs or toffs, in your class-laden world). If they have so little faith in their own company that they won't share in it, I would suggest that other investors should take that as a warning sign. Good companies have staff who care about the future of their own company.

[charliebird123]

http://news.sky.com/story/1156474/royal-mail-shares-hit-500p-a-week-after-sale

Did you get yours Creeky?

[joe_bloggs*]

Surprise surprise!

http://www.theguardian.com/uk-news/2013/oct/24/royal-mail-worth-10bn-jp-morgan

"One of the world's largest investment banks told ministers ahead of the Royal Mail flotation that they could sell the postal business for £10bn, around two and a half times more than the government finally received for it."

We'll have to see what The National Audit Office enquiry comes up with,I wonder what the tax payers alliance will have to say about this?

[upthecreekyetagain]

---

@al**bear wrote:

Shares should be sold at the correct price and as an Investment, for FUTURE growth, not sold cheap, so they can sold for a quick buck by spivs

---

But how do you know what the correct price is until trading starts following a launch of the stocks?

[charliebird123]

Shares up to £5.29 now,i've made a few quid out of it,and why not?

[al**bear]

---

@upthecreekyetagain wrote:

---

---

But how do you know what the correct price is until trading starts following a launch of the stocks?

---

Plenty warnings before sale, that they had set the price far too low, maybe ok to be 10% out, but not 40%

[lost.parrot]

In answer to the question, 'why not', one answer might be because others end up paying for the debt taken on, as well the lost revenue by deliberate under pricing.A freebie/benefit/bribe/sweetner,a give away of public funds.

[upthecreekyetagain]

---

@al**bear wrote:

---

@upthecreekyetagain wrote:

---

---

But how do you know what the correct price is until trading starts following a launch of the stocks?

---

Plenty warnings before sale, that they had set the price far too low, maybe ok to be 10% out, but not 40%

---

Share launches don't work like that though, do they.

Let's say the shares had been launched at 40% higher than they were - the demand for them would be patently lower than it was because there wasn't a potential profit in buying them.

The art is to calculate the level at which the shares should be discounted in order to create a little more than a 100% demand - in this case I would agree that the over-subscription demonstrates they were offered at too low a price which obviously has set the current price at an artificially high level.

I would guess that the price was set to low by a single figure amount.

[lost.parrot]

Actually they do.

Issuers look for the best possible return. Had that been a commercial entity issuing they would have been in litigation with the underwriters by now. Because it's the government looking at other factors, and it's public money, and elections are only just over a year away, it's different. They weren't that interested in return, other than to set it substantially low in order to let a few snouts in the trough. Other than that the money from the issue wasn't important, which is the opposite of what normal issues are about

[upthecreekyetagain]

---

@lost.parrot wrote:

Actually they do.

Issuers look for the best possible return. Had that been a commercial entity issuing they would have been in litigation with the underwriters by now. Because it's the government looking at other factors, and it's public money, and elections are only just over a year away, it's different. They weren't that interested in return, other than to set it substantially low in order to let a few snouts in the trough. Other than that the money from the issue wasn't important, which is the opposite of what normal issues are about

---

Twitter shares are trading at 80% above their initial offer price

[upthecreekyetagain]

---

@upthecreekyetagain wrote:

---

@lost.parrot wrote:

Actually they do.

Issuers look for the best possible return. Had that been a commercial entity issuing they would have been in litigation with the underwriters by now. Because it's the government looking at other factors, and it's public money, and elections are only just over a year away, it's different. They weren't that interested in return, other than to set it substantially low in order to let a few snouts in the trough. Other than that the money from the issue wasn't important, which is the opposite of what normal issues are about

---

Twitter shares are trading at 80% above their initial offer price

---

Now more than double - the premium on RM shares doesn't look quite as bad now

[lost.parrot]

Twitter I understand has yet to make a profit. It's a relatively new enterprise in  social networking sites which in itself is new and heaily dependent on advertising revenue it hasn't yet got .Its valuation is some 25 times next years projected earnings. It's a large premium based on very optimistic expectations of future advertising revenue , some might say similar to initial .com's. I doubt you would have got any consensus of underwriters on the current price. 

RM is no twitter. It's assets include some three substantial land sites, and it's core traditional business, which is subject to increasing competition

The government wrote off some billion or so debt, took on pension fund shortfall of varying estimates of between £5-10 billion.

If you are trying to tout twitter as a typical example, feel free

[upthecreekyetagain]

The only comparison I was making alludes to your statement, "Had that been a commercial entity issuing they would have been in litigation with the underwriters by now"

Just wondering when this litigation will start  

[lost.parrot]

Simple.The report I read said twitter issued itself after consultation with certain investors. 

[lost.parrot]

The question is was the issue significantly under priced prior to issue date.Given the general media consensus at that point the answer would appear to be in the affirmative. This is confirmed by joe public who were quite happy to offer up their cash in the relatively confident expectation of seeing an instant return on their cash, supported by past history and a nod and a wink on how these things unfold. Even those who have not bought any shares before would have been quite content to do so with the unstated assurance, there was little downside risk and had probably placed pre orders on their new ipad in full expectation.Free cash here-apply within

Regarding the larger picture, if I take the higher of the pension shortfall figures, the government has committed something like £11 billion or say $17 billion to enable the much smaller issue to take place - enough to have bought twitter outright at its initial offer price with cash left over.Thats public funds being transferred to others on a non means tested basis.Had I labelled that 'benefit' it would have made some apoplectic, yet its still public money, given
away for no apparent 'need' other than to be swilling in the trough come feeding time.Some may comeback to Conservative party funds through donations of gratitude, by larger feeders at the trough of course, but that isnt the
only level of self interest by the current administration. Having cleared the matter with EC competition rulings the government get to take on the RM funded pension scheme, shortfall and all, some estimated £28 billion in real liquid assets, and turn it into an unfunded scheme, paid out of general taxation, leaving them with what even the good old Daily Mail was frothing at the mouth over, a 'windfall'; as they put it of up to £28 billion of jam today, for everyone else to pay for tomorrow.
So, , quite a lot get to feed at the trough at various levels, whilst the long term liabilities for all are racked up, but then that's another day, and another administration

[lost.parrot]

I also meant to point out in the first post that not every adverse situation resulting from professional advice is actionable. 

If you receive medical treatment which turns out not to be correct, doesn't automatically make the hospital/medical staff negilgent. If they followed best practice as existed at the time, then it's unlikely they would be held liable even if the treatment was eventually detrimental. Similar best practice applies to other professional advice. If you were trying to suggest any advice received re twitter fell under such in point games, I think that would be  a'fail' as I hinted at yesterday, but obviously you needed help on. What investors are willing to buy at, isn't advice btw, it's an expression of their interest.

[upthecreekyetagain]

Parrot - I agree with your general point that the RM were generally underpriced on the IPO - I said as much in my earlier post.

I also accept that the government did take certain actions to make the offering more attractive.

And finally in the list of'agreements' I accept that the marketing of this launch, like previous 'privatisation' offers, was widely marketed to the general public meaning that the take-up by small investor was much greater than is seen with other IPOs.

Where I do disagree with you is the inference that these shares were deliberately offered at a large discounted price with the motives that you describe being behind the low offer price.

[spawnjohnuk]

but parrot is right ,im afraid..in fact spot on 🙂