Northern Rock - Shares [Merged Threads]

barak

david78 wrote: »

Err. I thought it did yesterday. Back up to about 190 now.

My £200 punt bought at 290 ea. isn't looking to healthy though. (bought at 0% commision from ATS).

I don't think you should worry too much. According to today's Times a hedge fund manager has placed "a £50 million bet" on NR shares, "mostly thought to have been made in the 250p-300p range". If this is true, at today's closing price of 194.30p he would be at least £10M down :eek: - but of course it's not his money!

His_Lordship

barak wrote: »

I don't think you should worry too much. According to today's Times a hedge fund manager has placed "a £50 million bet" on NR shares, "mostly thought to have been made in the 250p-300p range". If this is true, at today's closing price of 194.30p he would be at least £10M down :eek: - but of course it's not his money!

There will be a few foreign buyers sniffing around willing to pay a premium, Spanish or French, as some of the UK bidders have been blocked by BoE/FSA.

Optimist

The Daily Telegraph
Treasury must break silence to avoid Northern Rock II
By Damian Reece, City Editor
22/09/2007

Short sellers have made a £1bn profit from the Northern Rock crisis in just five frantic days, according to hedge funds involved. Fleet of foot investors borrowed half the bank's 420m shares when the crisis broke last Friday morning. They then promptly sold them, on the assumption they could buy them back cheaper and bank a sizeable profit. The shares opened last Friday at 639p and then crashed through the floor and kept going, down through the basement before lodging themselves in the sub soil on Thursday night at 185p.

The Treasury's move to stand behind Northern Rock's liabilities, effectively turning the debt into gilt-edged securities which it confirmed yesterday morning, helped stop the rot. The shares struggled back up to 194.25p last night. There have been plenty of losers from Northern Rock but there are also winners – short sellers chief among them. But the past week has turned Northern Rock into a giant roulette table and some big bets have been placed.

The shorters are obviously up, at the moment, but on Thursday buyers emerged, placing the opposite wager. RAB Capital bet £65m, taking a 6.5pc stake in the stricken lender, making the hedge fund its biggest shareholder. RAB's thinking is that the shorters will have to start buying again soon to cover their positions which will support the price. But the risk is that yesterday was just a pause in the relentless "downward dynamic", as one hedge fund manager put it yesterday. If short sellers feel the Treasury's underwriting of Northern Rock is temporary, then they will go again, forcing the share price down even more.

The Treasury has been ambiguous about how long its guarantee supporting Northern Rock is for. Will the Government be there for as long as it takes to get Northern Rock, and the money markets, back on their feet? Or will it simply provide the support for the minimum time it takes to find a buyer for Northern Rock's mortgage assets and a new home for its savers? A fire sale in other words. If it's the latter then there seems little to stop more short selling of the shares, driving the price to rock bottom as is usual in fire sales.

The financial authorities, such as they are, say it's savers they care about not shareholders. Hedge fund managers will this weekend be wondering whether to start a concerted shorting of other banks that have similarities to Northern Rock, testing the Treasury's resolve. In these febrile markets, where trust in the Government has broken down, it's not hard to create a sense of panic which could force more savers on to the streets.

The risk is there because of the Treasury's ambiguity – something that international capital markets will relentlessly exploit. If the Treasury is to avoid Northern Rock II it needs to clarify just how long it will stand behind the bank. Its silence sounds like it hasn't decided and that it's hedging its own bets. We now have the markets versus the Treasury and the record of this particular fixture does not bode well for those with political careers.

[Deleted User]

I think NRK should simply bid to buy itself with this years profits then it can become a building society again and the world has one less evil bank.

http://companyinfo.northernrock.co.uk/downloads/yourquestionsanswered.pdf

getoblast

well i used the search and found nothing... so enjoy your sleep as your reply was as much use as a chocolate fire guard.... yant!

jem16

All you had to do was input Northern Rock into the search function.

http://forums.moneysavingexpert.com/showthread.html?t=553760&highlight=northern+rock

bristolleedsfan

His_Lordship wrote: »

There will be a few foreign buyers sniffing around willing to pay a premium, Spanish or French, as some of the UK bidders have been blocked by BoE/FSA.

not looking good _pale_

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=424584&in_page_id=3

kennyboy66_2

Optimist wrote: »

The Daily Telegraph
Treasury must break silence to avoid Northern Rock II
By Damian Reece, City Editor
22/09/2007

Short sellers have made a £1bn profit from the Northern Rock crisis in just five frantic days, according to hedge funds involved. Fleet of foot investors borrowed half the bank's 420m shares when the crisis broke last Friday morning. They then promptly sold them, on the assumption they could buy them back cheaper and bank a sizeable profit. The shares opened last Friday at 639p and then crashed through the floor and kept going, down through the basement before lodging themselves in the sub soil on Thursday night at 185p.

Do you ever wonder why the story never reads "buyers lose £1bn in 5 days". After all for every seller there must be a buyer.

steve-o_3

Optimist wrote: »

The Daily Telegraph
Treasury must break silence to avoid Northern Rock II
By Damian Reece, City Editor
22/09/2007

Short sellers have made a £1bn profit from the Northern Rock crisis in just five frantic days, according to hedge funds involved. Fleet of foot investors borrowed half the bank's 420m shares when the crisis broke last Friday morning. They then promptly sold them, on the assumption they could buy them back cheaper and bank a sizeable profit. The shares opened last Friday at 639p and then crashed through the floor and kept going, down through the basement before lodging themselves in the sub soil on Thursday night at 185p.

The Treasury's move to stand behind Northern Rock's liabilities, effectively turning the debt into gilt-edged securities which it confirmed yesterday morning, helped stop the rot. The shares struggled back up to 194.25p last night. There have been plenty of losers from Northern Rock but there are also winners – short sellers chief among them. But the past week has turned Northern Rock into a giant roulette table and some big bets have been placed.

The shorters are obviously up, at the moment, but on Thursday buyers emerged, placing the opposite wager. RAB Capital bet £65m, taking a 6.5pc stake in the stricken lender, making the hedge fund its biggest shareholder. RAB's thinking is that the shorters will have to start buying again soon to cover their positions which will support the price. But the risk is that yesterday was just a pause in the relentless "downward dynamic", as one hedge fund manager put it yesterday. If short sellers feel the Treasury's underwriting of Northern Rock is temporary, then they will go again, forcing the share price down even more.

The Treasury has been ambiguous about how long its guarantee supporting Northern Rock is for. Will the Government be there for as long as it takes to get Northern Rock, and the money markets, back on their feet? Or will it simply provide the support for the minimum time it takes to find a buyer for Northern Rock's mortgage assets and a new home for its savers? A fire sale in other words. If it's the latter then there seems little to stop more short selling of the shares, driving the price to rock bottom as is usual in fire sales.

The financial authorities, such as they are, say it's savers they care about not shareholders. Hedge fund managers will this weekend be wondering whether to start a concerted shorting of other banks that have similarities to Northern Rock, testing the Treasury's resolve. In these febrile markets, where trust in the Government has broken down, it's not hard to create a sense of panic which could force more savers on to the streets.

The risk is there because of the Treasury's ambiguity – something that international capital markets will relentlessly exploit. If the Treasury is to avoid Northern Rock II it needs to clarify just how long it will stand behind the bank. Its silence sounds like it hasn't decided and that it's hedging its own bets. We now have the markets versus the Treasury and the record of this particular fixture does not bode well for those with political careers.

That sounds to me as though if the Treasury are hedging their bets, then so should we, and there's still some sense in holding back in buying NRK (if thats what you eventuall plan to do!) and maybe other similar companies (like AL and others) as they could also fall and thus there's potentially more to be made (should they come back up).

Still a unpredictable gamble so it seems!!!

Browntrout_2

steve-o wrote: »

That sounds to me as though if the Treasury are hedging their bets, then so should we, and there's still some sense in holding back in buying NRK (if thats what you eventuall plan to do!) and maybe other similar companies (like AL and others) as they could also fall and thus there's potentially more to be made (should they come back up).

Still a unpredictable gamble so it seems!!!

This share should be avoided by anyone who regards themselves as in investor, only for speculation, if you can get in and out quickly. The divi is now under threat and the company is being investigated by Goldman Sachs for the government, i.e. taxpayer. 125% mortgages, 6 times income, self certified, their book is potentially not profitable etc etc

Members of the U.K's Treasury Select Committee in Parliament called on Northern Rock PLC (NRK.LN) to abandon plans to pay out GBP60 million to shareholders only weeks after seeking emergency assistance from the government, according to The Times on Tuesday.
Representatives from all three political parties accused the beleaguered bank of "sending the wrong message" to taxpayers and customers by pressing ahead with the interim dividend, which is up 30% on last year, according to the newspaper.
Newspaper Web site: http://timesonline.co.uk