Buying Royal Mail Shares After Floatation?

drjunk

Hi. I applied for royal mail shares and think that I have qualified for £750 worth. I'm wondering if there's many out there thinking about purchasing shares after the float, due to not getting the amount of shares they applied for.

How much lower than £3.30 would the share price have to drop to equal the value of the £750 shares private investors have been issued?
Stamp duty, brokers fees etc.. will subtract from the value. cheers.

chewmylegoff

Depends what your dealing costs are. Say £12 flat fee and stamp of 0.05% to get the same 227 shares for approx the same total cost, the offer price would need to fall to about £3.23 (227 x £3.23 x 1.005 + 12 = £748.88; 227 x £3.30 = £749.10)

Ologhai

chewmylegoff wrote: »

Depends what your dealing costs are. Say £12 flat fee and stamp of 0.05% to get the same 227 shares for approx the same total cost, the offer price would need to fall to about £3.23 (227 x £3.23 x 1.005 + 12 = £748.88; 227 x £3.30 = £749.10)

Isn't stamp duty 0.5%?

chewmylegoff

Ologhai wrote: »

Isn't stamp duty 0.5%?

Yes hence the multiplier 1.005.

All moot as doesn't look like the price is going to 323 any time soon.

Ologhai

chewmylegoff wrote: »

Yes hence the multiplier 1.005.

All moot as doesn't look like the price is going to 323 any time soon.

As you say, but I was responding to your 'stamp of 0.05%' text.

barak

chewmylegoff wrote: »

Yes hence the multiplier 1.005.

Where did you learn arithmetic?

chewmylegoff

Ologhai wrote: »

As you say, but I was responding to your 'stamp of 0.05%' text.

Whoops! Well the calculation is correct...

chewmylegoff

barak wrote: »

Where did you learn arithmetic?

Seems right to me. If a share costs £1 then the total cost including stamp will be £1.005.

Ologhai

barak wrote: »

Where did you learn arithmetic?

Multiplying by 0.005 (or 1.005 if you want to calculate the total) is how you'd work out 0.5%.

At least I think it is. I'm always nervous that I've woken up in another universe today where arithmetic is slightly different to the universe I'm more familiar with, but...

barak

Ologhai wrote: »

Multiplying by 0.005 (or 1.005 if you want to calculate the total) is how you'd work out 0.5%

Ologhai, I wasn't querying your post which was correct - but chewmylegoff originally said 0.05% and equated that with 1.005

0.05% surely implies [say] £1000 x (0.05/100) = 50p which is wrong!
0.5% [as you said] gives [say] £1000 x (0.5/100) = £5 which is correct, unless of course it's a "paper" deal in which case there is no Stamp Duty at all as it's under £1000.01!

And [it gets worse] if it is a £1000.01 "paper" deal it's rounded up to nearest £5 so you pay £10 which is 0.99% !! Extortionate!

chewmylegoff

I think what we should do now is have a massive internet argument about whether 0.05% was a typo or not.