Royal Mail float

[mudskipper]

Questor share tip: What could Royal Mail be worth in two years? - Telegraph

It's like Noel Edmonds' box game

Deal too early and you could have won more. Deal too late and you could lose the lot.

I presume we have the option of selling some and keeping some.

[PEEL]

From the FT:

Stagging. It’s a term barely heard since the dotcom boom. But it’s making something of a reappearance as banks prepare to close the books on the Royal Mail flotation.
It means selling a share into a strong market immediately after an initial public offering to lock in an instant profit. “Staggers” were a feature of the big 1980s privatisations, which were often attractively priced to maximise interest, and also of the technology boom.

Amid talk of massive oversubscription, and Royal Mail shares zooming to an instant premium, talk of stagging is in the air again. But there are good reasons not to bother.
1) Size of allocation. If the stories about oversubscription are true, investors will get less (and possibly a lot less) than they applied for. If you end up with only a few hundred shares, the potential profit will be limited in absolute terms – especially given that you’ll have to pay dealing commission to sell.

2) Timing. The shares start trading on Friday morning on a conditional or “when issued” basis. Trades conducted during this period cannot be settled until unconditional dealings begin on Tuesday, October 15. Holders of shares in certificate form may have to wait longer until they can deal.

3) Dividends. Even at the top end of the pricing range, Royal Mail will be a yield stock. Sell the shares at the outset and you’ll miss out on these payouts. And over longer periods, reinvested dividends form a large part of total returns.

4) Run your winners. One of the golden rules of stock market investing is to run your winners. If something goes up, you should hold on to it until it stops going up, or until it no longer meets your investment criteria – not dump it at the first available opportunity. Look at some of the companies that have come to market so far this year. Estate agent Countrywide and builder Crest Nicholson are both up over 50 per cent. Conviviality, the purveyor of bargain booze that came to Aim just a couple of months ago, is up over 60 per cent.

There is one plausible reason to sell Royal Mail shares as soon as you get them. The FTSE 100 is at a six-month low as investors fret about the effects of the US government shutdown. You may fear that the tide has turned and the market could now head a lot lower. But if that’s the case, maybe shares aren’t the right investment for you anyway.

[PEEL]

It will get a boost from tracker funds once it hits the FTSE in December. There's also a guaranteed dividend next summer. For the amounts involved, I'll probably hang on to my share of 5k for the medium-term, perhaps the full year.

Agreed on the tracker part. With respect to dividends, the yield on RM if the share price bumps to 420 will be similar to the yield on Vodafone.

[SimonMac]

Just a heads up, for all those with money in a SIPP or ISA you can't buy new shares until the unconditional period on 15th October, anyone can sell shares during the conditional period

[jamesbrown]

Well, that wasn't worth the effort

BBC News - Royal Mail shares priced at 330p

Sounds like everyone requesting below £10k will get just £750, and anyone requesting above £10k will get nothing.

[FiveTimes]

Well, that wasn't worth the effort

BBC News - Royal Mail shares priced at 330p

Sounds like everyone requesting below £10k will get just £750, and anyone requesting above £10k will get nothing.

what a crock of tulip.

[AtW]

what a crock of tulip.

Welcome to socialism - this Govt can't even privatise.

Next time they'll try to sell some asset people with more than £10k to invest might not even bother to bid in the first place.

[amcdonald]

It happened with most of the privatisations, they got oversubscribed

What is farcical is Vince Cable being Business Secretary, it's as pathetic as the 'Nobel' peace prize

[jamesbrown]

what a crock of tulip.

Yep, I really wouldn't have bothered.

I suppose with hindsight, it's not that surprising (there's a precedent for this, and it was massively over-subscribed afterall), but it would've been nice to allocate more shares to retail investors.

[AtW]

it would've been nice to allocate more shares to retail investors.

Hehe, how many of those retail investors did not plan to sell it for a quick profit? Govt is tuliping itself to avoid massive share drop at start that would piss off lots of people who wanted a quick buck - that's why they cut off people with £10k+ offers