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Thoughts On Royal Mail

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I realise now the RMG privatisation was deliberately priced low - I wish I'd bought some shares, but I would have applied for more than £10K and would have had my order refused according to the way the float was mishandled. But it's clear that the privatisation was intended to be a mini-stimulus, with many having got an instant 50% uplift on their money.

So Lloyds flotation? Many will expect the same there too. A flotation of shares that is really a one-way bet mini-stimulus. But problems here:

1. After the criticism of the low price of RMG, the government may feel it has to price Lloyds less generously.

2. Unlike RMG, the government has a significant investment in LLOY that it has to try and recoup as much as it can of, and so the flotation needs to generate as much as possible for the government.

3. I'm wondering if they'll allocate more to retail investors and make clear that larger allotments will be made.

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I realise now the RMG privatisation was deliberately priced low - I wish I'd bought some shares, but I would have applied for more than £10K and would have had my order refused according to the way the float was mishandled. But it's clear that the privatisation was intended to be a mini-stimulus, with many having got an instant 50% uplift on their money.

So Lloyds flotation? Many will expect the same there too. A flotation of shares that is really a one-way bet mini-stimulus. But problems here:

1. After the criticism of the low price of RMG, the government may feel it has to price Lloyds less generously.

2. Unlike RMG, the government has a significant investment in LLOY that it has to try and recoup as much as it can of, and so the flotation needs to generate as much as possible for the government.

3. I'm wondering if they'll allocate more to retail investors and make clear that larger allotments will be made.

How about this (consipracy theory #1);

The general populus thinks the government is incompetent on the back of their pricing for RM and are bound to get a huge bounce in the value of any shares that are government floated. On the back of this the government tries to manipulate the LLOY price at slightly above fair price and everyone jumps in feet first only to find they've been sold a lump of coal....

No guarantees buying shares....everyone needs to remember - DYOR :)

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Better to take your money to the casino and place a strategic bet on a roulette wheel, for example if your number comes in gain 50%, if it doesn't lose 50%.

At least you can watch the wheel spin and you know it's not rigged.

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Well the "greater fool" who paid for the RMG windfalls was the taxpayer who got a poor price for their shares - OK, we are all "the taxpayer", but we don't care what happens to the taxpayer in general do we? The taxpayer is an abstraction.

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I suspect the 'loss' on the shares from the 330p pricing rather than say 450p or 500p is fairly insignificant (only £1bn or £2Bn IIRC) compared with the pension liability the taxpayer (including those who did not buy the shares) has taken on.

Yes. I'm hoping the taxpayer will be equally generous when it comes to floating LLOY shares - taking a huge loss so as to offer the shares cheaply - or even as some investment banks have suggested giving free shares to all people in the UK.

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Well the "greater fool" who paid for the RMG windfalls was the taxpayer who got a poor price for their shares - OK, we are all "the taxpayer", but we don't care what happens to the taxpayer in general do we? The taxpayer is an abstraction.

Especially as "the taxpayer" is more and more often the next generation.

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I realise now the RMG privatisation was deliberately priced low - I wish I'd bought some shares, but I would have applied for more than £10K and would have had my order refused according to the way the float was mishandled. But it's clear that the privatisation was intended to be a mini-stimulus, with many having got an instant 50% uplift on their money.

So Lloyds flotation? Many will expect the same there too. A flotation of shares that is really a one-way bet mini-stimulus. But problems here:

1. After the criticism of the low price of RMG, the government may feel it has to price Lloyds less generously.

2. Unlike RMG, the government has a significant investment in LLOY that it has to try and recoup as much as it can of, and so the flotation needs to generate as much as possible for the government.

3. I'm wondering if they'll allocate more to retail investors and make clear that larger allotments will be made.

This is the first tranche of many the government will sell off in the next few years so they had to make it work and look popular to make sure the others in the future work.

Lloyds and RBS are orders of magnitude bigger and they will need a frenzy to off load any significant amount of their holding in either.

Lloyds initial sale will be bigger but they need to make sure there is slightly more demand for the shares than the number they sell. load.

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RMG was wholly owned by HMG so there was no market in is shares prior to flotation. LLOY shares are only partly public owned and is already traded on the Stock Market. Those who think they are going to make lots of quick 'free money' out of the latter are likely to be disappointed when the government finally sells of its stake.

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How about this (consipracy theory #1);

The general populus thinks the government is incompetent on the back of their pricing for RM and are bound to get a huge bounce in the value of any shares that are government floated. On the back of this the government tries to manipulate the LLOY price at slightly above fair price and everyone jumps in feet first only to find they've been sold a lump of coal....

No guarantees buying shares....everyone needs to remember - DYOR :)

I think you are right! Priced cheap to make the future sell-offs look like a "sure bet". :huh:

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Yes. I'm hoping the taxpayer will be equally generous when it comes to floating LLOY shares - taking a huge loss so as to offer the shares cheaply - or even as some investment banks have suggested giving free shares to all people in the UK.

Considering the UK taxpayer has already bought them it seems only democratic everyone gets a slice of what was bought.

Similarly everyone should get RBS shares as well. At least the share certificate could double as toilet paper if your really desperate.

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