Is RMG going down the toilet?

I_have_spoken

Closing price of Royal Mail on Friday 441p, less than they opened on 1st day of trading. :eek:

Now they're ex-divi, I'm bailing on Monday along with the smart money -
Royal Mail shares: are professional investors selling out?

Thrugelmir

Shares prices fluctuate as that's the nature of a market. The risks to the business were all detailed in the prospectus. Did you read it before investing?

custardy

dividend paid
people sell
price drops

vectistim

The cynic in me says the price has been manipulated to reduce claims that it was undersold.

Thrugelmir

vectistim wrote: »

The cynic in me says the price has been manipulated to reduce claims that it was undersold.

Not that Amazon is going to create it's own parcels delivery service?

masonic

vectistim wrote: »

The cynic in me says the price has been manipulated to reduce claims that it was undersold.

Well in that case it has a lot further to fall.

Scarpacci

I think Amazon's raising of the free delivery threshold is perhaps of even more concern to RMG than the direct competition on the delivery front. This change is leading to people ordering less/combining what would have been separate orders. It lowers the competitive pressure on other online stores to offer free delivery, so we could see similar happening across the board at stores which offer free delivery. It will also likely increase the growth of click and collect, which might remain free and can be done more efficiently.

Amazon has been handling some of its deliveries for a while now and it looks like that would compete more with Yodel, Hermes and maybe DPD, rather than Royal Mail. Added competition doesn't help, of course, but I don't think Amazon could build that up to a point where it's competing more with RMG than it is with the couriers. RMG is going to have the advantage for most parcels most of the time, but with changes to free delivery and continued roll out of click & collect across the board, the question is whether the numbers of parcels being delivery is going to grow like RMG was counting on.

Thrugelmir

Scarpacci wrote: »

I think Amazon's raising of the free delivery threshold is perhaps of even more concern to RMG than the direct competition on the delivery front./QUOTE]

If you've followed Amazon over the years. It's business model is to squeeze the competition out of business until it becomes the dominant player.

I no longer buy from the Company if I can avoid it. Not least that I dislike their ethic with regards to treatment of employees. All rather too American in nature.

DaveTheMus

I sold RMG after a few weeks.....banked £300 profit IIRC......it was never a long term investment. Sold my BP holding at the same time and bundled into Unilever, which is a good long-term investment IMO.

I read an article today saying that RMG's value is in it's property empire, I know that they own one of the most impressive buildings in Glasgow centre. The author drew comparisons with the Coal Board and how they only padded their balance sheet by off-loading property. I have to say it did ring true.

Sending letters will die out along with buying newspapers or using a landline for anything other than broadband, It's old-fashioned.

Thrugelmir

DaveTheMus wrote: »

Sending letters will die out along with buying newspapers or using a landline for anything other than broadband, It's old-fashioned.

Was in Germany the week before last. While people own mobiles. There's nothing like the same visibility in the streets or restaurants etc. While the use of landlines at home is very much alive. Not everyone gets sucked in by the marketing of products that one has to own.

DaveTheMus

Thrugelmir wrote: »

Was in Germany the week before last. While people own mobiles. There's nothing like the same visibility in the streets or restaurants etc. While the use of landlines at home is very much alive. Not everyone gets sucked in by the marketing of products that one has to own.

It seems that the old East-Germany is positively [STRIKE]restraining[/STRIKE] influencing the new unified Germany.....