HBOS bail-out but why is the share price still so low ?

miaviv

The government has effectively part-nationalised HBOS today so why is their share price still taking a hammering ? I have loads of money invested in their offshore bank and I'm still worried even after the government "bail-out". Should I be or am I just being paranoid ?

StevieJ

Terms were changed for the Lloyds takeover, also no divis to be paid.

gaol

Because the merger with LLoyds was renegotiated, from 0.8 to 0.6 Lloyds shares for every 1 HBOS share.

Blah99

And no dividends...

miaviv

But should I be directly worried about the bank or is the share price just a "side issue" and not directly related to the health of the bank itself ? Or am I being a bit niaive ? Sorry for the questions, which may to some seem obvious but I am really clueless about how markets and shares all work !

Reaper

And, I assume, the shares were diluted by the need to issue a big bunch of new ones to the government.

baby_boomer

Why on earth should Lloyds shareholders vote for this deal which is likely to mean that they emerge from the government's embrace later rather than sooner?

Blah99

If you have money in an onshore HBOS bank you have absolutely nothing to worry about. If you have it in an offshore account I would pay serious attention to any implications of this, such as maybe not being covered by the FSCS.

Onshore, every-day punter bank accounts in the big banks are safe as houses. Offshore accounts are fair game - they "should be" just as safe because any bailout of HBOS will apply to "all of" HBOS, but with offshore stuff you just don't know.

gaol

baby_boomer wrote: »

Why on earth should Lloyds shareholders vote for this deal which is likely to mean that they emerge from the government's embrace later rather than sooner?

The recapitalization is dependent on the merger going through. To be fair, Lloyds are getting a massive bargain long term. As are taxpayers imho.

Blah99

Blah99 wrote: »

Onshore, every-day punter bank accounts in the big banks are safe as houses.

I should probably clarify. When I say "safe as houses", I don't mean they're going to lose 15% of their value over the next year

miaviv

Blah99 wrote: »

I should probably clarify. When I say "safe as houses", I don't mean they're going to lose 15% of their value over the next year

Ha, I like that one and so true, you just don't know what's happening anymore and every bad rumour can start a market crash !