Royal Mail Shares

Redstar_72 wrote: »

Thanks, I was thinking of £1,000. I'm fortunate that i can release that from savings safely without having to worry unduly. I plan to hold them for the foreseeable future and see how the divs do.

Pete.

The dividend from this early stage has been estimated to be between 6 and 7% which will be the highest dividend paying stock in my portfolio. I am buying £5,000 worth so even at 6% that is 300 and I am hoping the divi will grow year on year.:T:T

Redstar_72 wrote: »

Good luck with it.
Do you know what happens if the share release is over subscribed? Are they allocated prorata to the value you request or does it turn into a lottery?

What would be done depends on the extent of over-subscription.

What typically happens is that applications are scaled back but with the smallest applications being met in full. They usually won't want people holding too tiny packets of shares that are costly to administrate but in the past when there was serious over subscription to privatisations there were times when small subscriptions were cut back but those asking for large amounts got none.

So it can be tricky, ask for £10k on the expectation of being scaled back to £5k and you could get the full whack if the take up is poor, or none if the take up is high.

Redstar_72 wrote: »

Thanks for that helpful response.

Pete.

If you want £1000 worth I'd be a bit surprised if you didn't get them in full. The politics make privatisations different to a normal IPO and governments will always want to be seen to be looking after small investors.

Archi_Bald wrote: »

Good luck to you.

Let's come back to this thread in about 6 years time.

Why? Do you think Royal Mail will go bust then?

A_Flock_Of_Sheep wrote: »

Why? Do you think Royal Mail will go bust then?

Absolutely. It is just a matter of time. The same is true for any company in history.

This article http://www.fool.co.uk/news/investing/investing-strategy/2009/05/27/25-years-of-the-ftse-100.aspx explains why olny a handful of the original companies making up the FTSE100 are still in it today.

I like 6 years, to me that feels like a good yardstick. Royal Mail I feel is inevitably doomed without some really clever footwork, as delivering bits of paper is a dying industry. But no government wants a national treasure to flop on IPO and so suspect we will see enough subsidy to keep it afloat for a bit.

I'm not buying though!