Saga share offer

Glen_Clark

christineperseus wrote: »

I thought it stood for Sex And Games for the Aged

I thought it stood for Sex and Games Abroad
Seriously the 5% free shares in return for a lock in is a negative to a cynical b*stard like me.
Why are they that keen to stop people selling their SAGA shares?

dealsearcher

2010 wrote: »

In fact not as wide as RMG was originally!

260p to 330p.

But you knew the RMG price before you bought. You are expected to apply now without knowing the Saga price. That is my point, along with the unknown dividend payout after one year.


And there is the lock in to keeping the shares for a year before the 5% extra shares. That could be a severe cramp to a serious investment amount.

2010

dealsearcher wrote: »

But you knew the RMG price before you bought. You are expected to apply now without knowing the Saga price. That is my point, along with the unknown dividend payout after one year.


And there is the lock in to keeping the shares for a year before the 5% extra shares. That could be a severe cramp to a serious investment amount.

I said what and why I`m doing in post #2.
We seem to agree.(er, I think) :cool:

bowlhead99

dealsearcher wrote: »

2010 wrote: »

dealsearcher wrote: »

In fact the IPO price is not yet known. All that is known at present is a share price between 185p to 245p. That is a wide spread!

In fact not as wide as RMG was originally!
260p to 330p.

But you knew the RMG price before you bought. You are expected to apply now without knowing the Saga price. That is my point, along with the unknown dividend payout after one year.

With Saga, the price is roughly 215p give or take 14%. As 2010 says, with RMG, it was 295p give or take 12% and that was the initial basis on which they produced the prospectus and people started to subscribe. All IPOs work that way, you are expected to put up cash without knowing the exact definitive final price, which they can only tell you when they know how many applications they get.

In an IPO you also cannot know what the profits and dividends will be over the next year or two or five, all you have is analysts and speculators telling you what they think, plus a nice big prospectus which might contain "forward looking statements" but are not guarantees. The year one dividend is not what you buy a company for: it is more the dividends and capital payouts from years 2 to infinity that gives you the value for the company. That has not been published or accurately guesstimated by anyone for Saga, Royal Mail or any other IPO company.

However with RMG it then became quite clear (especially when all the opposition MPs were shouting that the government should have priced it higher, and the media was reporting that they were being flooded with applications), that it was going to price towards the top of the indicated range. So you would get fewer shares than you had perhaps hoped for, for each pound you invested, if you had thought 295p was a fair middle price on which to base your investment decision but they price it 14% higher.

Still, if you thought the same way as I did, you would likely still be OK with that because you knew a lot of other people out there thought it was worth a lot more than even 330p.

And there is the lock in to keeping the shares for a year before the 5% extra shares. That could be a severe cramp to a serious investment amount.

Holding it for a year to pick up a bonus issue is entirely optional. You can sell on day 2 or on day 364 if you prefer.

The people who bought at IPO but didn't qualify through the customer preferential offer won't get the bonus at all, and they will be diluted when a large number of free shares spring into existence after the year, for everyone who hung on long enough to qualify. The customers who do have the free shares on the way have a bonus opportunity and are not 'severely cramped'. Nothing stops them taking their 'serious investment amount' off the table at any point, other than psychology. Sure, it could lead to 'gamblers ruin' for some inexperienced investors which is why I mentioned it in another post, but is not actually a bad option to have if you are sensible.

You need to think of it like getting a free drink in Las Vegas while playing the casino tables. The cocktail waitress comes round every 10 minutes or so and you can get a drink of pretty much whatever you like just by tipping her a dollar or two. However, if you carry on gambling while waiting for the free drink, the drink could cost you £200. Of course, if lady luck is on your side you could make £200 and a free drink. But your decision to continue playing is really the expected net gain/loss for the 10 minutes against your entertainment value for the 10 minutes.

The drink (and another glimpse of the waitress's skimpy outfit) is a sweetener but should not stop you leaving when you think the overall value of hanging around is no longer worth the risk.

I don't think the free shares to customers is an underhand tactic or says anything worrying about the company. They would like to reward their customers and encourage loyalty but they won't achieve that very well if they just give you free cash on day 1 and say you can do what you like with it. That just plays into the hands of carpetbaggers who have no loyalty or interest in sharing the future fortunes of the company, and just want a payout.

Instead, they say "you can buy our shares and if you keep them a long enough time rather than dumping them, you will get a reward that means you own more of our company because we will not be giving them to everyone". Of course, if you buy 1000 shares at £2 at IPO and then are given 50 free ones after a year, you will have more of the company than someone who bought 1000 shares at £2 at IPO and doesn't qualify for the free offer - BUT might still not own as much of the company as someone else who just goes out and buys 1200 shares more cheaply than you on the open market during the course of the first year's trading.

adaadat

This is a slight newbie question: would it be possible to transfer a Saga share-holding to a relative?

I'm interested in the offer, for the medium to long term, but as I don't hold any Saga product, I don't have as guaranteed - as much as it is for anyone - an allocation of shares, as my parents, who hold an insurance product with them.

My parents aren't interested, so I wondered if they could transfer a share purchase (bought with my money), to me, given they stand a greater chance of gaining the allocation I would want?

I guess this is share dealing basics, so apologies for how daft the question may sound.

Chargem

adaadat wrote: »

This is a slight newbie question: would it be possible to transfer a Saga share-holding to a relative?

I'm interested in the offer, for the medium to long term, but as I don't hold any Saga product, I don't have as guaranteed - as much as it is for anyone - an allocation of shares, as my parents, who hold an insurance product with them.

My parents aren't interested, so I wondered if they could transfer a share purchase (bought with my money), to me, given they stand a greater chance of gaining the allocation I would want?

I guess this is share dealing basics, so apologies for how daft the question may sound.

I believe this is relatively easily done, if your parent(s) make an application and receive a share certificate, they can send this to the registrar with a completed stock transfer form (available as a download from the relevant registrar) and the shares will be transferred into your name.

[I'm editing this post because I haven't read the terms and conditions of the bonus shares, but I imagine that if you were to transfer the shares then you would not be eligible for the bonus shares, and so I imagine your parents would have to hold the shares in their name for over a year. I don't know if this fact affects your decision making process]

There are some obvious warnings about doing this, namely:

• Your parent(s) are the legal owner of the shares until they transfer them and are under no obligation to transfer them to you
• The shares could form part of your parents estate if they died within 7 years (and the value of shares is above a certain threshold, I forget the amount)

dealsearcher

bowlhead99 wrote: »

With Saga, the price is roughly 215p give or take 14%. As 2010 says, with RMG, it was 295p give or take 12% and that was the initial basis on which they produced the prospectus and people started to subscribe. All IPOs work that way, you are expected to put up cash without knowing the exact definitive final price, which they can only tell you when they know how many applications they get.

With RMG the price was precisely 330p when offered, not an approximation as Saga is at present. Maybe a more precise figure for Saga will be stated before the closing date but it's currently just a range. It is not correct that the RMG price was not known.

bowlhead99

dealsearcher wrote: »

With RMG the price was precisely 330p when offered, not an approximation as Saga is at present. Maybe a more precise figure for Saga will be stated before the closing date but it's currently just a range. It is not correct that the RMG price was not known.

I'm not sure you have that right. I know it had become quite obvious from media and government speculation that it was likely to price at the high end of the indicative Price Range which 2010 quoted to us. So personally as an investor I was expecting it to be 330p or thereabouts.

But, so far as I can see, the prospectus including the price range and size range was published in September with deadline for applications by 8 October. Then on 10 October after the offer closed, they finalised the pricing statement and officially announced what the price was going to be. But only AFTER the applications process was complete. That is how IPOs work, no? When do you think the final price was announced? I'm happy to be corrected.

2010

bowlhead99 wrote: »

But only AFTER the applications process was complete. That is how IPOs work, no? When do you think the final price was announced? I'm happy to be corrected.

You are correct.

Val75

Hello, in the eligible customers book we have received it says:
It is expected that the offer price will be between £185p per share and 245p per share, however there is no guarantee that the offer price will not be above or below this range. Hmmm.


After reading all your comments, and the fact we have to spend minimum of £1000 , we think we will leave it alone.


He who hesitates is lost, but as we do not know the price and how many shares we will get, also have to wait a year to get the one in twenty free, maybe we should not dabble.


It has been really helpful reading what you all have to say, so thank you.


Regards Val