Will you be buying shares in Lloyds TSB?

ave_a_ris

Kua wrote: »

Joining this discussion late but as far as I understand it Lloyds have made a new issue which they are offering to existing shareholders at 38p/share and they have til 5th June to take them up. After that date will they be available on the general market at that price? Or is my thinking completely wrong there (I just read on another forum that it would work something like this).

I realise an investment in Lloyds at the minute is a total gamble but after seeing what happened with Barclays its hard to be uninterested :P .

No, whatever has not been taken up by qualifying shareholders will be sold to the market at the market price at the time. It is possible that the market price could be 38p at the time.

Barclays is in much better health than Lloyds, I wouldn't expect Lloyds to recover in the near future and given what is being uncovered at HBOS full nationalisation cannot be ruled out.

Kua

ave_a_ris wrote: »

Barclays is in much better health than Lloyds, I wouldn't expect Lloyds to recover in the near future and given what is being uncovered at HBOS full nationalisation cannot be ruled out.

Noted. Naturally I'll only risk what I can afford to lose. Now its a question of timing - we might well have seen the bottom price for this share...

Kua

My understanding is that those shares not taken up under the open offer go onto the market tomorrow. This will surely lower the share price... won't it. Quite willing to be proven wrong.

sabretoothtigger

Last september 18th Barclays sold £1.3bn of shares on one day at a discount to market price and the share price still rose 25% higher on the day

Lloyds did similar on that day to fund hbos

Not sure how many bn will be sold or the demand for it forthcoming but its not certain that being offered a discount to the market price will actually see a drop.
If they sell immediately it would I guess but if big institutions buy and hold it might not

More recently 11% of barclays was sold in one day by the arab guy at a 260p discount I think it was and the price did fall back to 274 but I think the bigger picture matters.


Some big pension fund will snap up the shares and I will guess there is no big movement in market price because of it.
But later if lloyds have bad news then it'll grease the wheels some

Thrugelmir

sabretoothtigger wrote: »

More recently 11% of barclays was sold in one day by the arab guy at a 260p discount I think it was and the price did fall back to 274 but I think the bigger picture matters.

These shares were placed with around 200 institutional investors. So as not to cause market distortion. The investors would have been sounded out for a buying price well prior to the day of the sale. If that number of shares had been put for sale in a single day, or even over a few days. The price would have fallen through the floor until the market settled down again.

sabretoothtigger

Sure and I think lloyds will do similar and contact their biggest share holders first.
They'll want people to hold them not immediately sell them

Its always the big guy who gets the sweetest deal. I wouldnt mind 10% interest pref bank shares like buffet has

Thrugelmir

sabretoothtigger wrote: »

Sure and I think lloyds will do similar and contact their biggest share holders first.
They'll want people to hold them not immediately sell them

Its always the big guy who gets the sweetest deal. I wouldnt mind 10% interest pref bank shares like buffet has

Slightly different situation. As some institutional investors will have agreed to underwrite some of the shares issue. I'm sure that Lloyds priced the issue to be a success. So as to keep as much independence from the Government as possible.

MONEYME

Advice: Don't buy these shares for the next 1 to 2 weeks.
There's millions of shares available by this share option so the price will be majorly diluted for a while.

ave_a_ris

MONEYME wrote: »

Advice: Don't buy these shares for the next 1 to 2 weeks.
There's millions of shares available by this share option so the price will be majorly diluted for a while.

If the price is diluted, would that not then be a good time to buy? Are you suggesting we wait until they go up before parting with our money? A strange investment strategy.

mrposhman

MONEYME wrote: »

Advice: Don't buy these shares for the next 1 to 2 weeks.
There's millions of shares available by this share option so the price will be majorly diluted for a while.

I think I'll act off my own instincts thanks instead of someone trying to drive down the share price.

ALL OF THE SHARES WILL BE TAKEN UP. They won't be flooding the market with new shares. Most institutions will be buying these shares too as will the government so the issue is likely to be a fairly good success.

If you want to see what happened with Taylor Wimpey you will see why you shouldn't bet on the price only going down. Many on other sites were saying that the price would be volatile on the first day of trading and it would fluctuate up and down. It did nothing of the sort and has gradually increased since then. It was 33p on June 1st (1st day of issue) and has steadily risne since then to 38p as it currently stands so don't believe everything as nothing is a sure thing in life.