Quote:
Originally Posted by mrmistoffelees
Heard this on Radio 4 driving down to work this morning.
Shares were bought at 500p (ish) and we've sold I think it's 5.4% at 330p which includes a 7% discount.
So the debt has been crystalised over night to the tune of £1bn
Now call me a cynic, but this has been done on the advice of the 'impartial' Rothschilds
---------- Post added at 09:03 ---------- Previous post was at 08:59 ----------
http://www.bbc.co.uk/news/business-33769906 |
The discount was 7.6pence, which is 2.3%, just FYI.
Anyway, aside from the fact that the govt should have sold a bit quicker when the share price was higher, let's face it, it isn't going to get to 500p this side of 2017.
The ironic thing here is that the stock price will rise a bit once the govt do sell off a significant share of RBS. Why? Because at near an 80% stake, the majority of shares in RBS were effectively "locked" and between them and long term institutional investors. This means that liquidity in the shares would be very low, and the ability, and thus demand in trading for RBS shares is significantly dampened. More shares in the market will spark demand, and as long as RBS don't lose money hand over fist, it should have a positive effect on the share price, meaning at least a bit more money for the Treasury when they sell more shares.
Of course, let's not get caught up in market realities when a good old fashioned anti banking rant will do the job just fine. Oh and it's not crystallising debt, that's absurd talk. It's a loss on investment, sure but the debt required to pay for the bailout has long been accounted for, and is secured on much better security than our stake in RBS!
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