Lloyds TSB Shares

singingsister

Hi everyone

My hubby has just over 200 shares with Lloyds TSB that he's had since he was 13 (he's now 35).

Currently they are only worth about £60.

We went bankrupt last year and yesterday the official recievers office (who manage the bankruptcy) sent him a letter asking him if he wants to buy the shares and if so to make an offer.

Now we can't really afford the £60 but I'm loathed to just write the shares off and not buy them until we've done some research into it.

For example, Lloyds TSB are heavily involved in sponsorship of the Olympics. Would this have any effect on the share price? (positive or negative).

If the shares might go up over the next few years then I reckon we should stump up the cash and "buy" them. But if they're not, then there is no point keeping them.

I know Lloyds are owned by the government (or something like that) so don't know how it all works with regards to selling shares etc.

We have to get the letter back within 7 days so don't have long to make a decision.

We don't have a financial adviser so can't ask him/her!


Any help is greatly appreciated.


singingsister

srcandas

If LloydsTSB were major sponsors of the Olympics it might well be a sign of growth plans and make them rather attractive. Buy in reality it is debts within the bank that are the worry.

The government, thus us tax payers, own a large number of the bank's shares but it is a quoted company in which we can all buy and sell shares as we like. Is it likely to make the share holders rich in the short term? Well today the brokers say:

Strong Buy: 13
Buy: 1
Neutral: 10
Sell: 2
Strong Sell: 2

So I'd throw in a very very very low offer (remember it would cost you probably £10 minimum to sell them so you need them to grow considerably before you make any money at all). There is a good chance the official recievers office will accept as the admin of handling the sale of the shares by them could be more than half their value.

But good luck with your rebuilding :beer:

BLB53

Offer them £40, could well be worth £80 or more next year.

Jegersmart

Sorry to hear about the bankruptcy, however I am puzzled why 200 shares of LLOY are even being discussed now, especially when you say you can't afford £60. I would channel all my time and energy into getting back on your feet personally - and hope that it all works out.

J

singingsister

Jegersmart wrote: »

Sorry to hear about the bankruptcy, however I am puzzled why 200 shares of LLOY are even being discussed now, especially when you say you can't afford £60. I would channel all my time and energy into getting back on your feet personally - and hope that it all works out.

J

I know we are a bit confused as to why suddenly we've got a letter about these shares out of the blue!!!

We can find the £60 - just trying to decide whether to "write off" the shares and not buy them or whether it would benefit us in the long term buying them.

singingsister

srcandas wrote: »

If LloydsTSB were major sponsors of the Olympics it might well be a sign of growth plans and make them rather attractive. Buy in reality it is debts within the bank that are the worry.

The government, thus us tax payers, own a large number of the bank's shares but it is a quoted company in which we can all buy and sell shares as we like. Is it likely to make the share holders rich in the short term? Well today the brokers say:

Strong Buy: 13
Buy: 1
Neutral: 10
Sell: 2
Strong Sell: 2

So I'd throw in a very very very low offer (remember it would cost you probably £10 minimum to sell them so you need them to grow considerably before you make any money at all). There is a good chance the official recievers office will accept as the admin of handling the sale of the shares by them could be more than half their value.

But good luck with your rebuilding :beer:

I'm not sure I understand what you mean about the OR office handling the sale etc. Can you explain for the shares layperson like me?

What would you advise we offer for them?

srcandas

singingsister wrote: »

I'm not sure I understand what you mean about the OR office handling the sale etc. Can you explain for the shares layperson like me?

What would you advise we offer for them?

I imagine that as part of the process you have sadly gone through that the OR office are now the owners of a share certificate for 200 LloydsTSB shares. To turn that into money requires them to sell those shares. A typical fee for a one off transaction might be £10. But for them there is the administration. They need to document the shares sale, make it happen, cash the resulting cheque, and record the outcome. So it could cost them say £40 allowing for the time involved.

So I suspect they would rather you took the certificate (and thus the shares) off their hands. Of course if you buy them you become the owner and now have the money tied up until you can sell.

I'd go for £30 and hope you get lucky. If not nothing lost and you still have £30 to do what you want with.

To be honest to the administrator £60 is neither here nor there

:beer:

Jegersmart

singingsister wrote: »

I know we are a bit confused as to why suddenly we've got a letter about these shares out of the blue!!!

We can find the £60 - just trying to decide whether to "write off" the shares and not buy them or whether it would benefit us in the long term buying them.

What I meant was that I don't understand the focus on such tiny amounts at a time like this. If you would have to "find" £60 then investing in a stock which will cost you around £10 to sell later on is not worthy of attention at a time like this...imho...

Good luck!

J

bowlhead99

Ignore the fact that he used to own these particular shares. Sentimentality for particular companies that once looked like a good investment, has lost a lot of money for a lot of people. If you have to pay to buy them, they are not currently yours.

So, you have £50-60 in cash. The question is,

1) out of all the things in the world that you could do with £50-60, do you want to invest in shares on the stock market. Bearing in mind it is very inefficient to invest a relatively small amount of money in the stock market, because it will cost you £10+ to sell them, which is nearly fifth of your £50-60!

2) if you do want to invest in the stock market, would you really put it all into just one company?

3) if you did want to risk it all on the fortunes of one company, would you want that company to be a bank?

4) if you did want to risk all of your money on the fortunes of one specific bank, would you want that bank to be LloydsTSB?

Most rational people, thinking with their head rather than their heart, would not have said yes to question 1, let alone still be saying yes at question 4.

Also consider:

Lloyds TSB has issued 70.34284 billion shares. You are being offered the chance to buy 200 of them. The other 70,342,839,800 shares are mostly owned by professionals acting on behalf of large financial institutions like pension funds etc who hold them as part of a wide portfolio of shares and other assets all over the world. Their money is spread around so a loss in the value of a single UK company would be annoying but not a major problem and will likely be offset by other shares going up. If they decide to sell their Lloyds shares, the dealing costs will be virtually nothing (not a fifth of their value, like yours).

Of the 70 billion shares, held by professionals, more than 60 million of them change hands every working day. On average, they sell at about 30p. If these professionals, with their huge portfolios and tiny dealing costs thought they were really 'worth' more than 30p each, they would sell for more. They don't. And as the risk to you would be higher than the risk to the professionals, you shoudn't either.

The only reason to buy them is if you they will accept a small offer, say £10-20 for the shares. Worth a try. Then mentally write it off, but in a year or two's time find a broker to help you sell them (may cost you £10-20-40 and a bunch of paperwork to do a one-off trade).

singingsister

bowlhead99 wrote: »

Ignore the fact that he used to own these particular shares. Sentimentality for particular companies that once looked like a good investment, has lost a lot of money for a lot of people. If you have to pay to buy them, they are not currently yours.

So, you have £50-60 in cash. The question is,

1) out of all the things in the world that you could do with £50-60, do you want to invest in shares on the stock market. Bearing in mind it is very inefficient to invest a relatively small amount of money in the stock market, because it will cost you £10+ to sell them, which is nearly fifth of your £50-60!

2) if you do want to invest in the stock market, would you really put it all into just one company?

3) if you did want to risk it all on the fortunes of one company, would you want that company to be a bank?

4) if you did want to risk all of your money on the fortunes of one specific bank, would you want that bank to be LloydsTSB?

Most rational people, thinking with their head rather than their heart, would not have said yes to question 1, let alone still be saying yes at question 4.

Also consider:

Lloyds TSB has issued 70.34284 billion shares. You are being offered the chance to buy 200 of them. The other 70,342,839,800 shares are mostly owned by professionals acting on behalf of large financial institutions like pension funds etc who hold them as part of a wide portfolio of shares and other assets all over the world. Their money is spread around so a loss in the value of a single UK company would be annoying but not a major problem and will likely be offset by other shares going up. If they decide to sell their Lloyds shares, the dealing costs will be virtually nothing (not a fifth of their value, like yours).

Of the 70 billion shares, held by professionals, more than 60 million of them change hands every working day. On average, they sell at about 30p. If these professionals, with their huge portfolios and tiny dealing costs thought they were really 'worth' more than 30p each, they would sell for more. They don't. And as the risk to you would be higher than the risk to the professionals, you shoudn't either.

The only reason to buy them is if you they will accept a small offer, say £10-20 for the shares. Worth a try. Then mentally write it off, but in a year or two's time find a broker to help you sell them (may cost you £10-20-40 and a bunch of paperwork to do a one-off trade).

That makes PERFECT sense. Thank you.

I'm only upset for my husband as they were bought as a 13th birthday present by a family member who is no longer here. So just for sentimental reasons really!

markwilkinson

If you can get them cheap enough, say sub £40 then I would go for it, purely based on your last message when you mentioned "sentimentality". What's £40 in the grand scheme of things? If anyone wanted to buy 200 shares in Lloyds, at todays price, it would cost them £60.60 plus charges.

I've never been bankrupt and I don't know the process but I would imagine it's a pretty soul destroying business. Getting the shares back gives you a bit of interest in the markets, checking the share price as and when, etc. If they go up sufficiently then sell them and make bit, or keep them indefinately and hope they start to pay dividends?

I'd do it but thats just my 2p's worth.