Saturday, October 12

Royal Mail Shares Should I Sell?

What to Do with My Royal Mail Shares?

So, the government sold off the Royal Mail on the cheap as expected. How do we know it was sold on the cheap? Well, the price shot up 40%, which means it could have been sold for 400p at least instead of 330p and all those nasty spivs and speculators, (you  and me) could still have made a quick profit.

Here's a video from the Daily Telegraph's Questor on what to do with your Royal Mail shares now.

Plus the government apparently (according to the Financial Times) tried to increase the price above the 330p that had been fixed, but the bankers were having none of it and threaten to withdraw their support. So the bankers knew what they wanted and the government had to like it or lump it and blow out a whole load of sulphurous stinking smoke from the rear ends about what a success it had been, and let the banks make another pile of free money.

Joe Public got 227 shares (unless he was a 'rich' Joe Public and disgracefully applied for more than £10k despite that being one of the options and despite expecting to receive only half or a third) and could sell them and make a quick 220 quid. Except that if you were with the UK's largest stockbrokers Hargreaves Lansdown you couldn't, because their website crashed and was down all day and their telephone service was useless. People with a Hargreaves Lansdown account discovered that if ever there was a crash they would be shafted, as they couldn't trade any shares at all, not just Royal Mail shares. Lots of disgruntled Hargreaves Lansdown customers, and some of them are saying that this could be a good time to short the stock!

Lots of other punters, with other brokers, did manage to sell their 227 shares on Friday (at a rate of around 40 people a minute all day long) and presumably lots more will be selling via their brokers on Monday. This didn't stop the price rising to 455p by end of play on Friday (significantly it rose sharply in the last hour). Some analysts say the shares are worth in the region of 600p - presumably we won't see 600p on Monday but the price may well go higher than the 455p they are at now.

After Monday, comes Tuesday when the vast majority of private retail punters will be able to sell their shares and join the ranks of the spivs and speculators that Vince Cable hypocritically claims he doesn't like. So that would make around 300,000 spivs and speculators making a couple of hundred quid each. There is little  point hanging on to 227 shares for the long term, better to wait and try and pick up a larger more meaningful amount if the price falls back. So all this cobblers about helping the small investor is just that, cobblers.

It is quite possible that the share price will fall on Tuesday - so I will be selling mine on Monday.

At some point it might be worth buying some Royal Mail shares on the open market if the price falls back significantly, so I will be watching the price over the next days and weeks.

That's my thoughts on the Great Royal Mail Share Robbery.