work share save scheme advice

lilmissclass

Hi,

Hoping someone can help me with this.

3 years ago I entered work sharesave. I saved £150 monthly to get share options at the fixed share price of £2.34, at the time our shares were already £3.34.

At the end of the 3 years you could just get your money, 6k in my case, or you could purchase the shares and sell them through the company to make a profit. You then get your money plus the difference between the fixed rate and current rate.
I have 6months to use my share options.

I totally understand that, but during the 3 years are shares were really high in value (£6) our company then split each share. This is the bit I find confusing. The current share price is £2.10, does that mean I would lose money if i exercised the share option, or would my orginal number of shares be worth more once the company split them (into 3 i think)


Please help - i know so little about finance, I saved hard and just want my money to work for me.

lilmissclass

Just found some more info -

2007 - " announced today that it is planning a share split to boost liquidity and marketability of the stock. the proposal is to divide each ordinary share of 5p into three new ordinary shares of 1.67p."



I have no idea what that means or more importantly how it impacts me.

Im also taking part in a new sharesave at work, but want to know how successful the last one was or I might just save my money elsewhere..

opinions4u

You really need to contact your HR department or the scheme administrators for absolute clarity.

Logic says that the £2.34 offer price should also be split in 3 (78p a share).

If that's correct, you could be sat on a very nice potential gain.

Based on £6,000 this would buy you over 7,600 shares. If their current price is around the £2 mark that's over £15k for you.

lilmissclass

Thanks.

I phoned following your advice, you are right, its 76p a share. I will have almost 8000. A leeter is coming to me 1st feb.

Obviously I am going to buy the shares, but now I dont know whether I should sell immediately, or wait out to see how the shares go.

I know shares can go up and down.

But its a good company, relatively unhit by credit crunch.