Sale of the century

kabayiri

It seems the government needs a bit of cash from down the back of the nation's sofa.

https://www.bbc.co.uk/news/business-44366731

Average purchase price for RBS shares : just over a fiver. Sale price : a little over half that.

Just the odd 2 billion quid loss then. No biggie.

Funny thing is. I remember wiser commentators than myself make grand statements at the time of the purchase of the shares by the government. The ebullient mood was that we could even turn in a profit.

How things change.

Any predictions for the average share price Mr Corbyn would have to pay to renationalise energy and transport? Maybe express it as an overvalued multiplier figure if it's easier.

westernpromise

Nil. He would first pass a law constructively making it illegal for them to make a profit, which would reduce their share price to pennies, then nationalise them for nothing.

Malthusian

Funny thing is. I remember wiser commentators than myself make grand statements at the time of the purchase of the shares by the government. The ebullient mood was that we could even turn in a profit.

My understanding was that up until now we had made a profit on the bailout, from the sale of Lloyds shares. But it looks like that will be wiped out by the loss on RBS as it stands. In theory that could all change again given the Government still owns 62.4% of RBS, but I doubt it will ever go above water.

Should have been allowed to go bust (even though I bank with RBS) but we are where we are. If not now then when? Any investor or trader knows that refusing to sell a share at a loss is a recipe for losing even more money.

The thread title "sale of the century" implies that the Government is somehow selling the shares off cheap. They aren't. The shares are worth what the market says they are worth. What they were worth when the Government paid for them is irrelevant.

kabayiri

I think the government of the day overpaid for RBS et al. The banks were in no position to negotiate.

But...it's just another historical failure.

What I don't get is how they can give us confidence in the future plans for things like financing the new nuclear plants. I suspect we will be looking at a similar failure in years to come.

Arklight

So we spent billions in taxpayer money bailing out RBS. Funded RBS loan for Kraft's hostile takeover of Cadburys. Watched helplessly as Kraft eviscerated Cadburys and laid off almost all its British workforce, and are now taking a £2bn bath on RBS stock?

The British taxpayer must really have MUG written all over them.

GreatApe

Arklight wrote: »

So we spent billions in taxpayer money bailing out RBS. Funded RBS loan for Kraft's hostile takeover of Cadburys. Watched helplessly as Kraft eviscerated Cadburys and laid off almost all its British workforce, and are now taking a £2bn bath on RBS stock?

The British taxpayer must really have MUG written all over them.

So what would sir Arklight have done?
Let RBS go under causing a deeper and longer recession?

Oh let me guess you would have magically made sure a global recession never happened just like Tony and Gordon did let a recession happen

Recessions happen. Plenty of companies fail in a boom and more in a bust.
And the right people were mostly hurt. What was RBS market cap before 2008? Over £100 billion? What did the shareholders get post recession? Well they were mostly diluted out and hold something like 90% less value than they did 12 years ago

Like always dont let perfection be the enemy of the good.
The UK is doing well. The world is doing well

kabayiri

GreatApe wrote: »

So what would sir Arklight have done?
Let RBS go under causing a deeper and longer recession?
...

http://money.cnn.com/2014/12/19/news/companies/government-bailouts-end/index.html

If the Americans could turn a profit, then what does it say about our management of the problem?

Why should we accept weak pathetic government promises over future investment?

Arklight

GreatApe wrote: »

So what would sir Arklight have done?
Let RBS go under causing a deeper and longer recession?

Oh let me guess you would have magically made sure a global recession never happened just like Tony and Gordon did let a recession happen

Recessions happen. Plenty of companies fail in a boom and more in a bust.
And the right people were mostly hurt. What was RBS market cap before 2008? Over £100 billion? What did the shareholders get post recession? Well they were mostly diluted out and hold something like 90% less value than they did 12 years ago

Like always dont let perfection be the enemy of the good.
The UK is doing well. The world is doing well

I'm sure that's an enormous comfort to the Cadbury's workers who lost their jobs when one of the UK's most iconic companies vanished overnight thanks to a foreign hostile takeover from a company that is barely solvent itself funded by a bankrupt state owned British bank.

Of course they managed to find a lender of last resort from somewhere didn't they?

I'm not sure that pointing out the shareholders took a bath on their investment when 63% of them are you and me is as clever as you believe it to be.

westernpromise

That's Labour for you - wreck the banks then moan about it as though it were someone else's fault.

Moral incompetents the lot of them.

Malthusian

GreatApe wrote: »

Let RBS go under causing a deeper and longer recession?

Yes. Far more important companies than RBS have gone bankrupt and the world hasn't ended. You drastically overestimate the significance of the People's Banking Co-operative (formerly RBS).

westernpromise

Yes, that worked so well for Syriza in Greece.