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Santander Shares Tumble After Overnight 7.5 Billion Euro Share Sale

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Reuters 9/1/15

'(Reuters) - Shares in Spain's Santander tumbled more than 10 percent on Friday after the bank sold 7.5 billion euros (6 billion pounds) of new shares at a steep discount to improve its capital strength and fund growth.

The eurozone's biggest bank announced the quick-fire share sale late on Thursday and sold 1.2 billion shares at 6.18 euros apiece, at the bottom of the indicated price range and a 10 percent discount to its previous share price.

The shares were down 10.9 percent at 6.11 euros by 0820 GMT, which dealers blamed on the pricing of shares at the bottom of the range, the dilutive nature of the extra shares and the sheer size of the offer in the market.

However some investors and analysts were supportive of the move.

Davide Serra, founder and CEO of hedge fund Algebris Investments, tweeted: "Smart decision. Build Fortress Capital to take advantage distressed assets and Growth if surprises. Win/Win. Ahead of the curve."

In a break from the past, Santander's new chief Ana Botin unveiled the share sale and cut the bank's dividend to lift its capital strength and fund expansion.

It was the latest sign Botin is stamping her mark on the bank after taking over from her late father, Emilio, who ran Santander for 28 years until his death last September. Capital levels at Santander have long been under scrutiny, but the bank had resisted calls to improve it by raising cash from shareholders.

Santander said the cash will be used to grow in its key markets, including Spain, Brazil, Britain and the United States.

But the fundraising still prompted speculation it could look at acquisitions, with Italy's Monte dei Paschi and Portugal's Novo Banco seen as possible targets.

Goldman Sachs and UBS were joint bookrunners for the share offer, one of the biggest accelerated bookbuilds ever in Europe.'

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Free money for those in the know. Reckon lots of successful investors make money by discounted placings which they get access to while the smaller retail investors do not. I've been on the sharp end of such practice before, share price walked down by 35% over a few weeks without any apparent reason, then hey presto a private placing appears, all allocated at a discount to the low price. Those in the know just sold their holdings and bought them back at the placing price, I'd guess. Like George's mate Nathan and his Royal Mail millions in a day. I'd like to see some of these types do a virtual stockmarket challenge to see how they would get on.

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Free money for those in the know. Reckon lots of successful investors make money by discounted placings which they get access to while the smaller retail investors do not. I've been on the sharp end of such practice before, share price walked down by 35% over a few weeks without any apparent reason, then hey presto a private placing appears, all allocated at a discount to the low price. Those in the know just sold their holdings and bought them back at the placing price, I'd guess. Like George's mate Nathan and his Royal Mail millions in a day. I'd like to see some of these types do a virtual stockmarket challenge to see how they would get on.

^^ Absolutely, been there too, don't touch the rat infested market with a bean outside of pension as a result.

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Free money for those in the know. Reckon lots of successful investors make money by discounted placings which they get access to while the smaller retail investors do not. I've been on the sharp end of such practice before, share price walked down by 35% over a few weeks without any apparent reason, then hey presto a private placing appears, all allocated at a discount to the low price. Those in the know just sold their holdings and bought them back at the placing price, I'd guess. Like George's mate Nathan and his Royal Mail millions in a day. I'd like to see some of these types do a virtual stockmarket challenge to see how they would get on.

Yep, though I think it usually happens in companies a lot smaller than Santander.

You could always sign up with a stockbroker who handles placings, and ask them to notify you of such events so you can participate. That's a bit like going a step up the corporate ladder from a crowdfunding website.

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Almost like they took advantage of everyone looking at the news from France. Cynical, me?

I've got some of my fund in a 123 account there so I'll pay a bit more attention to this.

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Yep, though I think it usually happens in companies a lot smaller than Santander.

You could always sign up with a stockbroker who handles placings, and ask them to notify you of such events so you can participate. That's a bit like going a step up the corporate ladder from a crowdfunding website.

Well, call me an idiot, but I feel I'm above such behaviour. I know that modern living UK is to ****** people over as much as possible, but somehow I can't join the party.

I'll leave before I submit to the prevailing madness.

Edited by Joan of The Tower

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Free money for those in the know. Reckon lots of successful investors make money by discounted placings which they get access to while the smaller retail investors do not. I've been on the sharp end of such practice before, share price walked down by 35% over a few weeks without any apparent reason, then hey presto a private placing appears, all allocated at a discount to the low price. Those in the know just sold their holdings and bought them back at the placing price, I'd guess. Like George's mate Nathan and his Royal Mail millions in a day. I'd like to see some of these types do a virtual stockmarket challenge to see how they would get on.

But your complaints do not apply in this case - the share price fell after the announcement of the discounted rights issue.

However, l do not doubt what you say in general - I have limited faith in Chinese walls. You said you were at the sharp end of this practice - out of interest could you state the company and rights issue you were referring to?

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But your complaints do not apply in this case - the share price fell after the announcement of the discounted rights issue.

However, l do not doubt what you say in general - I have limited faith in Chinese walls. You said you were at the sharp end of this practice - out of interest could you state the company and rights issue you were referring to?

Ithaca Energy, a few years ago.

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However, l do not doubt what you say in general - I have limited faith in Chinese walls. You said you were at the sharp end of this practice - out of interest could you state the company and rights issue you were referring to?

A rights issue is different. Crucially, existing shareholders get priority, and can usually make a little money by selling rights if they don't want them. Indeed, rights issues can be quite profitable, though since they usually happen when a company is in trouble, those profits are merely recouping previous losses in most cases. I've made a few quid buying after a rights issue is announced but before the cut-off date, most recently with First Group (sold once it had recovered to just under £1.40).

A placing bypasses existing shareholders and goes straight to serious investors: institutions and individuals who opt in. I think the main reason to prefer them to rights issues is that it's cheaper for the company: much less money wasted on fees to investment bankers and brokers.

Off the top of my head, some companies that have placed discounted shares while I've been a shareholder include Stobart group (which I no longer hold: sold at a good profit and quite a way above today's price), and Atlantis Resources (where I'm sitting on a loss but looking for it to come good in due course). In both cases I have misgivings about their management: the former has become clear bargepole territory while the latter had assured us just a few months earlier that he would not need to raise new equity funding.

Of course none of those are remotely near the scale of Santander. But then, Ana Botin was several years in charge of Santander UK, so she presumably learned our cut-throat banking practices.

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A rights issue is different. Crucially, existing shareholders get priority, and can usually make a little money by selling rights if they don't want them. Indeed, rights issues can be quite profitable, though since they usually happen when a company is in trouble, those profits are merely recouping previous losses in most cases. I've made a few quid buying after a rights issue is announced but before the cut-off date, most recently with First Group (sold once it had recovered to just under £1.40).

A placing bypasses existing shareholders and goes straight to serious investors: institutions and individuals who opt in. I think the main reason to prefer them to rights issues is that it's cheaper for the company: much less money wasted on fees to investment bankers and brokers.

Off the top of my head, some companies that have placed discounted shares while I've been a shareholder include Stobart group (which I no longer hold: sold at a good profit and quite a way above today's price), and Atlantis Resources (where I'm sitting on a loss but looking for it to come good in due course). In both cases I have misgivings about their management: the former has become clear bargepole territory while the latter had assured us just a few months earlier that he would not need to raise new equity funding.

Of course none of those are remotely near the scale of Santander. But then, Ana Botin was several years in charge of Santander UK, so she presumably learned our cut-throat banking practices.

Surely Stobart and Atlantis were p1ss pot little operations, run by a bunch of crooks, fleecing outsiders?

Whereas Satander is a massive operation. run by a bunch of . . .

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First turd to leave the back of the shorts?

Pretty obvious what has been going on to create all this demand amidst flatlinng wages.

The central banks this time have made bubbles out of pretty much every market.

http://davidstockmanscontracorner.com/todays-dip-is-a-warning-get-out-of-the-casino/

In a nearby re-post from the New York Times this morning (Wake-Up Call To Yellen: Here’s How To Buy A BMW On Food Stamps—–Soaring Auto Junk Loans), we suggested that Janet Yellen needed a wake-up call. The NYT obsessively “fact checks” everything—so here’s the real deal. The auto junk paper market is so out of hand that an unemployed NYC food stamp recipient recently got a $30,770 loan to buy her daughter a BWM 328xi so that she could drive to work…..in style, apparently.

This beneficent mom told no lender or dealer a lie. As related by the NYT:

Ms. Payne went with her daughter to a dealership that arranges loans for Santander and other auto lenders to buy the car. She said an employee at the dealership in Great Neck, N.Y., assured her that, even though she was on food stamps, she could afford the loan. At the time, Ms. Payne said she thought she was co-signing the loan with her daughter.

“I looked him in the eye and said, ‘I don’t have any income,’ ”
said Ms. Payne.

Needless to say, Santander Consumer USA is a pure artifact of financial engineering deeply subsidized and coddled by the Fed. As a former LBO and now IPO, it is overwhelmingly funded with securitized auto paper. That is, it is able to fund BMW loans to mom’s on food stamps because it can bury them in massive baskets of loans that are then sliced and diced by Wall Street, and sold to investors desperate for “yield”.

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Santander said the cash will be used to grow in its key markets, including Spain, Brazil, Britain and the United States.

Just in case there was any doubt that the ECB QE will impact British house prices...

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Well, call me an idiot, but I feel I'm above such behaviour. I know that modern living UK is to ****** people over as much as possible, but somehow I can't join the party.I'll leave before I submit to the prevailing madness.

Ethical Stance - There may be a glimmer of hope yet.

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First turd to leave the back of the shorts?

Pretty obvious what has been going on to create all this demand amidst flatlinng wages.

The central banks this time have made bubbles out of pretty much every market.

http://davidstockmanscontracorner.com/todays-dip-is-a-warning-get-out-of-the-casino/

Needless to say, Santander Consumer USA is a pure artifact of financial engineering deeply subsidized and coddled by the Fed. As a former LBO and now IPO, it is overwhelmingly funded with securitized auto paper. That is, it is able to fund BMW loans to mom’s on food stamps because it can bury them in massive baskets of loans that are then sliced and diced by Wall Street, and sold to investors desperate for “yield”.

..It is only a matter of time before one “surprise” after another turns up owing to the speculative mania of the last six years. And it is virtually certain that the central bankers who have presided over this fiasco will be caught as flat-footed as they were during the sub-prime fiasco.

Well I can stomach more reckless lending for BMWs to food-voucher recipients (another soft-heart cause of many of the forever HPIers on HPC), so long at it's all leading to the biggest prime HPC of all time. Not much extra bad lending to help keep it all afloat and delude and pull in even more dumb money from house buyers/BTLers etc, before the crash.

Then we'll have to listen to all the HPI chasing sluts, with their spreadsheets calculating their future HPI gains, blaming the banks again - unable to accept they were responsible for their own decisions, as their debts weight heavily, or they lose lots of their 'protected' hyperinflated equity.... and their complaints drowned out by generations of younger people to come able to enjoy much more realistic house prices/lower debt/volume mortgage lending on much lower house prices.

They're already repeating their excuses at stupid insane peaks as their debt lovers/HPI forever believers paying ever higher prices, new peaks, with their spreadsheets for forever HPI.

Crispin Odey Warns, Looming Recession Will Be "Remembered For 100 Years

Odey Asset Management

01/27/2015

Edited by Venger

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