Royal Mail shares

[steveo]

You all stand to make an instant profit of 250 quid at the taxpayers expense, then.

http://www.theguardian.com/uk-news/2013/oct/11/royal-mail-share-price-buyers-profit

Barna, how is this at the tax payers expense?

Or are you just following the bit from the quoted article"If the government had sold the shares at 450p, rather than 330p, it would have made an extra £600m for the taxpayer on top of the £1.7bn it made from the 52% stake in Royal Mail"

Maybe they wouldn't have sold at that price. Why not take the argument further and say if the government had sold the shares at 900p they would have made even more money?

I liked this bit from the left wing BBC "Labour, which opposed the privatisation despite its own efforts to sell part of the business in 2009...."

 

[Shrimpers are Magic]

Went for £5000 and assume I have been given the minimum sum of £749.10
Personally I don't give a rats arse what Barna or the Guardian think.

 

[Ricey]

Have I missed a quick few extra pennies here by not investing?

 

[londonblue]

Umm, the idea of shares is that you are investing money into something of value in the hope that it increases in value. Not that you are given something of value for nothing...unless you're on benefits.

i think it's fair to say that the government ensured that the rich were not the winners in this scheme since the lowest investors were given priority over those wanting to invest over 10k who got nowt. I'm not rich and I invested (all my savings as it happens)....they could crash next week so there was a risk.

I wonder how many people on low wages could afford shares. It would be interesting to see the income levels of the people who applied, and received shares.

 

[Neil_F]

I wonder how many people on low wages could afford shares. It would be interesting to see the income levels of the people who applied, and received shares.

This is all very after the fact. These people took some initiative and put their own money at risk. They may equally have lost money.

i don't understand this "rewards for all (except bankers)" and the notion that something of benefit to A must be at the expense of B. I don't care who got shares because it doesn't affect me as a taxpayer. I don't care about the income distribution of who purchased shares because everyone had the opportunity to do so. If people wanted to purchase shares but couldn't afford it then tough. There are plenty of things I would like to do but can't afford. Either be more realistic about your ambitions or find some more money.

as to the price, I don't know who valued it or how they did it. I do know two things though: the first is that the taxpayer had to take on the the Royal Mail pension obligations. Without that it would have been worth precisely zero. I do care about that as a taxpayer because it is a direct cash cost to me.

the second thing is that public offerings are a dangerous moment for a company. If the offer price is too high and the offer is under-subscribed then the price tanks and the company gets a reputation for being unwanted. Most offerings make sure they are fully subscribed by fixing the price accordingly.

could they have increased the price to say 400? Probably, but that is easy to say with hindsight.

 

[Tangled up in Blue]

Barna, how is this at the tax payers expense?

Or are you just following the bit from the quoted article"If the government had sold the shares at 450p, rather than 330p, it would have made an extra £600m for the taxpayer on top of the £1.7bn it made from the 52% stake in Royal Mail"

Maybe they wouldn't have sold at that price. Why not take the argument further and say if the government had sold the shares at 900p they would have made even more money?

I liked this bit from the left wing BBC "Labour, which opposed the privatisation despite its own efforts to sell part of the business in 2009...."

Stevo,

No need for semantics here.My meaning was perfectly clear.

If you require further explanation, I suggest you check out Londonblue's excellent posts on this thread.

The shares were sold at a knockdown price in a firesale.

"if the government had sold the shares at 450p, rather than 330p, it would have made an extra £600m for the taxpayer on top of the £1.7bn it made from the 52% stake in Royal Mail."

http://www.theguardian.com/uk-news/2013/oct/11/royal-mail-share-price-buyers-profit

 

[steveo]

Stevo,

No need for semantics here.My meaning was perfectly clear.

If you require further explanation, I suggest you check out Londonblue's excellent posts on this thread.

The shares were sold at a knockdown price in a firesale.

"if the government had sold the shares at 450p, rather than 330p, it would have made an extra £600m for the taxpayer on top of the £1.7bn it made from the 52% stake in Royal Mail."

http://www.theguardian.com/uk-news/2013/oct/11/royal-mail-share-price-buyers-profit

Barna, it wast a fire sale. At some stage they had to set a price. If they had over priced them and they didn't sell they would have looked daft. If they had priced them at 4.50 and the demand had been high you and your lefty paper would have been saying they should have priced them at 5.50

I didn't see any posts from you saying they were too cheap before the event. I'm sure you will agree it is easy to be wise after the event, especially as you seem to be an expert in this field.

 

[Tangled up in Blue]

Barna, it wast a fire sale. At some stage they had to set a price. If they had over priced them and they didn't sell they would have looked daft. If they had priced them at 4.50 and the demand had been high you and your lefty paper would have been saying they should have priced them at 5.50

I didn't see any posts from you saying they were too cheap before the event. I'm sure you will agree it is easy to be wise after the event, especially as you seem to be an expert in this field.

I'm not a financial analyst (though I've bought shares in the past).However,it was obvious to everyone and his dog that the shares were underpriced.

Hopefully, this will become clear when the circumstances of the sale are investigated by the National Audit Office.

"The National Audit Office, the public spending watchdog, will investigate the pricing of the float."

http://www.theguardian.com/uk-news/2013/oct/11/royal-mail-share-price-buyers-profit

 

[steveo]

So if it was that obvious why didn't you buy some?

 

[superblue24]

I'm not a financial analyst (though I've bought shares in the past).However,it was obvious to everyone and his dog that the shares were underpriced.

Hopefully, this will become clear when the circumstances of the sale are investigated by the National Audit Office.

"The National Audit Office, the public spending watchdog, will investigate the pricing of the float."

http://www.theguardian.com/uk-news/2013/oct/11/royal-mail-share-price-buyers-profit

What an utterly stupid article and a worrying lack of understanding of how shares work by Milibland and his cronies.

Barna, a simple lesson for you. If share prices are too high then people wont invest in them. Simple as that. I'm sure many of the people who invested wouldn't have touched them with a barge pole if they had been priced at £4.50 as that would have posed a much greater risk. It was announced that the share price would be between £2.60-£3.30 IIRC, so the tax payers (of which myself and all the other investors are, let's not forget) should take comfort in the fact the shares were sold off for the top-end of the range quoted. You could argue quite easily that if they had been priced at £4.50 and had no take up on them, the share prices would have dropped sharply and everything would have been the same as it is today.....

As for the Labour party "going off on one" about the sale of a "great institution", I've never heard anything so hypocritical in all my life... Was it the Tory party who sold all of our gold reserves off when gold was worth next to nothing? Or was it Labour? How much has that cost the country, Barna? (I know you like to ignore questions when the answers don't suit you, so I doubt you'll have a response to this). Funny how the Guardian makes no mention of that in its "the way we were" section at the foot of the article......

Why will it be investigated? It's in line with previous privatization share prices, so I don't see the issue.....Or is it because people stand to profit from the sale of shares? Good grief, what a joke and noise about nothing. But then I expect the Labour Party and Guardian to make mountains out of molehills as it's the only thing they have!

 

[Tangled up in Blue]

What an utterly stupid article and a worrying lack of understanding of how shares work by Milibland and his cronies.

Barna, a simple lesson for you. If share prices are too high then people wont invest in them. Simple as that. I'm sure many of the people who invested wouldn't have touched them with a barge pole if they had been priced at £4.50 as that would have posed a much greater risk. It was announced that the share price would be between £2.60-£3.30 IIRC, so the tax payers (of which myself and all the other investors are, let's not forget) should take comfort in the fact the shares were sold off for the top-end of the range quoted. You could argue quite easily that if they had been priced at £4.50 and had no take up on them, the share prices would have dropped sharply and everything would have been the same as it is today.....

As for the Labour party "going off on one" about the sale of a "great institution", I've never heard anything so hypocritical in all my life... Was it the Tory party who sold all of our gold reserves off when gold was worth next to nothing? Or was it Labour? How much has that cost the country, Barna? (I know you like to ignore questions when the answers don't suit you, so I doubt you'll have a response to this). Funny how the Guardian makes no mention of that in its "the way we were" section at the foot of the article......

Why will it be investigated? It's in line with previous nationalization share prices, so I don't see the issue.....Or is it because people stand to profit from the sale of shares? Good grief, what a joke and noise about nothing. But then I expect the Labour Party and Guardian to make mountains out of molehills as it's the only thing they have!

I refer you to the words of the Chairman of the Conservative thinktank,the Bow group for a reply:-

Ben Harris-Quinney said: "It should now be clear to even the staunchest supporters of the government's flotation of Royal Mail that the company has been significantly undervalued. The government has clamped down on investors to try to mitigate profiteering, but it has delivered the worst of both worlds: a company placed at a fraction of its value, and a sale too restricted to realise that value."

This privatisation is all about greed.Nothing more and nothing less.

 

[South Bank Hank]

This privatisation is all about greed.Nothing more and nothing less.

For the sake of simplicity: Wikipedia defines GREED as follows:

Greed is the inordinate [ie: Unusually or disproportionately large; excessive] desire to possess wealth, goods, or objects of abstract value with the intention to keep it for one's self, far beyond the dictates of basic survival and comfort. It is applied to a markedly high desire for and pursuit of wealth, status and power.

How is this privatisation all about that exactly?

I've never bought shares in my life - doesn't interest me - but doing so is no more an indication of greed than going to work for a living. We all need money and we all have the option of spending it on what we like, be that on purchases or investments for the future. There's nothing unusual, disproportionately large or excessive in any of that; and buying limited amounts of shares in a privatised company is hardly evidence of a marked high desire for and pursuit of wealth, status and power!

Absolute rot as ever.

 

[South Bank Hank]

ALL taxpayers were given the opportunity to make an instant profit as ALL taxpayers had the opportunity to apply for shares, and ALL taxpayers would have been subject to share allocation procedures. The only moot point is whether ALL taxpayers would reinvest ALL or just part of their profits back into the economy to the benefit of ALL taxpayers.

Assuming we could all afford to. I certainly couldn't.

Or put another way, it has allowed people with a higher disposable income (mostly the rich) to profit at the expense of the people with lower disposable income (mostly the poor).

I'm interested in why you only responded to half of my post and ignored the piece underlined above. And then why you think some people are profiting 'at the expense of other people'? I'm genuinely curious as to how person A buying shares is damaging, harmful or detrimental to person B who didn't?

Without the incentive of a reasonable profit, people would not have invested in the shares. A number of people made relatively small profits. Large investors were locked out. The government raised money. The economy received a needed cash injection which will serve ALL taxpayers, as will the reinvestment of profits made by the taxpayers who bought shares.

In what way did it cause these 'other people' harm, detriment and/or loss?

 

[steveo]

So if it was that obvious why didn't you buy some?

Barna? Or is this one of the hundreds of questions you ignore because you don;t have a Guardian quote to back you up with?

 

[steveo]

In what way did it cause these 'other people' harm, detriment and/or loss?

I've been wondering this as well. I had a nice little accumulator come in last night. My stake money was earnings I paid tax on. I made a decent profit. Was this at the expense of other tax payers? Did I harm anyone?

 

[Tangled up in Blue]

So if it was that obvious why didn't you buy some?

Barna? Or is this one of the hundreds of questions you ignore because you don;t have a Guardian quote to back you up with?

Believe it or not, I was actually working earlier but I intended to get back to you.

The answer is, for a mixture of practical and ethical reasons.

 

[Tangled up in Blue]

For the sake of simplicity: Wikipedia defines GREED as follows:

Greed is the inordinate [ie: Unusually or disproportionately large; excessive] desire to possess wealth, goods, or objects of abstract value with the intention to keep it for one's self, far beyond the dictates of basic survival and comfort. It is applied to a markedly high desire for and pursuit of wealth, status and power.

How is this privatisation all about that exactly?

I've never bought shares in my life - doesn't interest me - but doing so is no more an indication of greed than going to work for a living. We all need money and we all have the option of spending it on what we like, be that on purchases or investments for the future. There's nothing unusual, disproportionately large or excessive in any of that; and buying limited amounts of shares in a privatised company is hardly evidence of a marked high desire for and pursuit of wealth, status and power!

Absolute rot as ever.

[video=youtube_share;PF_iorX_MAw]http://youtu.be/PF_iorX_MAw[/video]

How would you describe people making a quick buck by buying (what they knew to be) underpriced shares,in what was essentially a b and b operation?

You sound like a Gordon Gekko fan to me.

 

[South Bank Hank]

How would you describe people making a quick buck by buying (what they knew to be) underpriced shares,in what was essentially a b and b operation?

I'd describe those people as being the means for making the government and us some money. If the shares had been underpriced, no one would have purchased and it would have defeated the object and raised none of the combined cashflows from the purchase price and the reinvestment of profits in the economy. Anyway, you answered my question with a question. How about an answer?

You sound like a Gordon Gekko fan to me.

I'm a firm opponent of any extreme and myopic views. On exactly that basis, the day I worry about what YOU think I sound like is the day I'll cease wanting to breathe.

 

[superblue24]

Gordon Gekko is one of my heroes.

 

[Tangled up in Blue]

I'd describe those people as being the means for making the government and us some money. If the shares had been underpriced, no one would have purchased and it would have defeated the object and raised none of the combined cashflows from the purchase price and the reinvestment of profits in the economy. Anyway, you answered my question with a question. How about an answer?

The point is, that shares in the Royal Fail were effectively given away at below their real market value, thus depriving the British taxpayer of a fair return, for what Harold Macmillan (when describing Thatcher's privatisations in the 80's) called "selling off the family silver."

http://www.channel4.com/news/royal-mail-share-sale-privatisation-free-money-investors