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I bought £150 worth of RBS shares when they were around 21p, and I planned to keep them for a few years. But if the govt sell all their shares will the share prices dip at that point in time due to the vast amount of shares being sold on the market?
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414Well that depends on the circumstances and the price at which the government sells. If they just drip them out into the market, it will put a hell of a cap on the share price while this is going on - but they are very unlikely to do this, much more likely to do a deal with a consortium to take all or some of the shares at a significant discount to the market price. If this discount is large, it won't do wonders for the share price AND there will be ongoing concerns that the new owners will want to sell their cheap shares at a profit asap, so any rally may run into the sands.
But getting rid of the government as a shareholder may mean that the bank is able to retunr to normal quicker, be less constrained on things and be able to pay more dividends, all of which could be good for the share price.
I can't say that it looks like a good investment proposition to me :( If you had larger sums of money involved, I would suggest banking your profit and moving on. But the dealing costs are so high on £400 that I suppose you may as well let it run.
manzanilla
Posted on 04 September 2009 |
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878There are 3 main ways that they can sell the shares. Drip and total sale as manzanilla said but also in tranches.
Tranches would probably be the most likely so as not to swamp the market. They would be spasmodic so that a cap would not be placed on the price until it was all finished.
There would probably be an opportunity for existing shareholders to participate.
As manzanilla says, dealing costs would be disproportionate at the moment. I would hold because you haven't a large sum to lose and the likelihood of profit is greater.
Mike
Posted on 04 September 2009 | Love 1 love
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6Thanks for you help. My initial investment was only £150, so I've made a fair bit on the already. I'm a student and I put all my savings into shares in January, about £800. I'm not looking to make loads of money, just a little profit would be nice. I think I might hold on to these RBS shares for a few years though.
Posted on 07 September 2009 | Love 0 loves
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