Wickes demerger

waynee

What do people think the outcome of Wickes demerging from Travis Perkins would be ? I have shares in the company and want to know if they increase or devalue.

bowlhead99

I think it will go fine. But that doesn't tell you what will happen to the share price.

The share price has certainly performed well since they announced it last summer:

Perhaps it has already gone up as much as it is going to go up for the next few years, as the people with (collectively) trillions of pounds of investment capital who make decisions on which companies are good to invest in on the UK stockmarket have already placed their bets and supply and demand has already moved the price to a fair level reflecting how market expectation will play out in reality.

Perhaps it has gone up a bit too much because the market was too over-enthusiastic about how much they will get for Wickes and how Brexit will affect their remaining business, so the price will deflate over the coming year or two.

Perhaps it has not gone up nearly enough as the demerger will go brilliantly and the remaining business is awesome and the market is being too cautious about their prospects.

'I want to know if the share price will go up or down' is an unrealistic demand. Everyone wants to know whether every share will do well or badly or middling. How they will actually perform is unknown. What you can say is that the people placing their bets on the financial markets currently believe that the price today is fair for the weighted probability of their prospects - otherwise, the buyers or sellers in the market would be buying or selling more and the price would change.