Northern Rock - Shares [Merged Threads]

Rhino666

Lets summarise the facts here....

1) Northern Rock is not insolvent
2) Northern Rock will not be allowed to fail
3) Takeovers opportunites for scavengers are not straightforward in this case
4) Company assets worth more than current share price

I can see that the knife may well still be falling as far as the share price is concerned and a return to £12+ is going to take some time. There is however a fair chance that when things settle and the queues go home, the share price will bounce back to £5 - £7. This could take a few months though :-)

Calchas

joannemi wrote: »

I am new to all of this so please bear with me...I have just had my share certificate through from my share save option at Sage UK Ltd. I was thinking of selling the shares I have and buying Norther Rock shares. Should I keep my Sage shares or buy Northern Rock shares?? Long term which do you think will generate me the most profitable return? I have about £2.5k

Hi there joannemi

I'm pretty new to this too.

I'm not sure you will get your question answered in this thread . It might be an idea to try posing it here:

http://forums.moneysavingexpert.com/showthread.html?t=59404&page=11

Browntrout_2

Rhino666 wrote: »

Lets summarise the facts here....

1) Northern Rock is not insolvent
2) Northern Rock will not be allowed to fail
3) Takeovers opportunites for scavengers are not straightforward in this case
4) Company assets worth more than current share price

I can see that the knife may well still be falling as far as the share price is concerned and a return to £12+ is going to take some time. There is however a fair chance that when things settle and the queues go home, the share price will bounce back to £5 - £7. This could take a few months though :-)

Point 1 is debatable
Why have a point 2 statement if point 1 is a fact?
Point 3 agreed
Point 4 the same as point 1

The debate is the loan book and the deposits, looks like a business that has grown too fast, it thrives on the oxygen of wholesale lending, that market has been extinguished.

If the rental market and 100% mortgage self certified borrowers start to default over the coming months...

The share price is usually a leading indicator of what is happening, any previous share price is history.

I feel very sorry for the employees of this business, some of them will have their savings there as well.

benood

Memo to self - next time you feel like making risky investment check first with Yant1! :beer:

Still waiting for the bidders.... someone is going to make a packet out of this, appears less likely to be me today, however!

Rhino666

Browntrout

The fact that NR is not insolvent doesn't mean it cannot fail, especially when a load of panicking customers are drawing billions - it is being temporarily supported - that is the point isn't it ?

So in your opinion, Northern Rock will collapse and the shareholders will lose their money ?

dunstonh

It has been reported that the asset value alone would see a share price of around 450-500 (from Citywire on Friday).

Nick_C

dunstonh wrote: »

It has been reported that the asset value alone would see a share price of around 450-500 (from Citywire on Friday).

Opinion on the FT website is the mortgage business could be worth as little as £1.80 a share!

http://www.ft.com/cms/s/0/3138d642-648b-11dc-90ea-0000779fd2ac.html

Last published price (10:15) £2.96

dippy

Rhino666 wrote: »

Lets summarise the facts here....

1) Northern Rock is not insolvent
2) Northern Rock will not be allowed to fail
3) Takeovers opportunites for scavengers are not straightforward in this case
4) Company assets worth more than current share price

I can see that the knife may well still be falling as far as the share price is concerned and a return to £12+ is going to take some time. There is however a fair chance that when things settle and the queues go home, the share price will bounce back to £5 - £7. This could take a few months though :-)

And the most important of all:
5) There is currently a run on this bank to the tune of £2billion in 3 days (1 working day)

dunstonh

The figure of less than £2 has been quoted a few places if the business isnt bought and goes into wind down. That is the risk the shares are. It could go 50% either way really based on a £3 share price.

Browntrout_2

Rhino666 wrote: »

Browntrout

The fact that NR is not insolvent doesn't mean it cannot fail, especially when a load of panicking customers are drawing billions - it is being temporarily supported - that is the point isn't it ?

So in your opinion, Northern Rock will collapse and the shareholders will lose their money ?

Too many double negatives in the first point there, not sure what you are saying.

In answer to the original thread poster and your second point - the stockmarket is a barometer, at present it is saying that this company has no future, as shown by a drop of 75% from 1200 to 300 in 7 months.

In my opinion NRK COULD collapse. I hope it does not, I hope it continues to trade in the savings and mortgage market as NRK or is taken over.

However I do not know, and no-one does, this is shown by the fact that is trading at 50% discount to NAV.

My point is for inverstors thinking this might be bargain, yes it might be, it also might be 100% over-valued at any price. The governments first responsibility will be with creditors, employees and savers, shareholders are last in the queue when it comes to distribution of assets.

Any single company investment is high risk, ask anyone who had Marconi, that once great institution.