RM share price falls below 400p for first time since IPO

[TrueBlueTerrier]

Royal Mail share price falls below 400p for first time since IPO

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Shares in Royal Mail have fallen below 400p for the first time since its IPO last October.

The stock has hit a low of 397.9p per share today after rival UK Mail issued a revenue warning because of a decline in parcel volumes.

That's a year-low for the stock, which has attracted much controversy for its transition to a public company. Some 60 per cent of the business was sold at 330p a share, raising £2bn for the Treasury.

But critics claimed it had been significantly undervalued when its share price soared 38 per cent on its first day of trading.

The share price has more or less consistently been in decline since the start of this year as the chart below shows.


Royal Mail share price since IPO (Source: Google Finance)

The IPO is now the subject of an investigation headed by former City minister Lord Myners, into whether taxpayers were ripped off as a result. The investigating panel is looking into how shares were priced, how they were allocated and how priority investors were selected.

It is also looking into whether the company's property portfolio was correctly handled.

The business, innovation and skills select committee has this week launched an inquiry into competition within the postal sector. It has called for evidence to be submitted by interested parties no later than October 24.

[Lounge Lizard]

Too late now but those who opted in to the SAYE scheme may soon be regretting doing so.

[TrueBlueTerrier]

Too late now but those who opted in to the SAYE scheme may soon be regretting doing so.

Why?

The price now doesn't affect the SAYE scheme as its based on the 3.60 value, now if its lower than that at the end of 3 years we won't make anything, and we lose only the interest you would have got from a savings account. Based on my current savings record that works out at around £1.80 compound.

[Judgee]

Too late now but those who opted in to the SAYE scheme may soon be regretting doing so.

Idiot child did you even read what the SAYE involves? As TBT says worse case scenario you lose peanuts in interest and you can pull your savings out at anytime. Hardly going to cause mass regret and suicides across the work force!

[Lounge Lizard]

Too late now but those who opted in to the SAYE scheme may soon be regretting doing so.

Idiot child did you even read what the SAYE involves? As TBT says worse case scenario you lose peanuts in interest and you can pull your savings out at anytime. Hardly going to cause mass regret and suicides across the work force!

There's no need for the "Idiot child" insult.
If, as is now quite possible, you "won't make anything" then you will lose the interest that you would have made if you had invested the money elsewhere.

[TrueBlueTerrier]

Just worked it out on a calculator at http://www.thisismoney.co.uk/money/savi ... lator.html" onclick="window.open(this.href);return false; and using the Post Offices own 1.4% APR the different over 3 years would be £14.90

The current highest rate I have seen available (albeit its a fixed term 5 years instead of 3) is 3.21% which would yield £34.75.

So at todays rate about just less than 90 minutes overtime or 3 hours at the top end.


Yes your right about the Idiot Child insult so a proverbial for Judgee

[RobertT]

Buying shares is a gamble regardless of the company or the method used and is not necessarily for the faint hearted. I know myself what’s like to ‘lose’ large amounts of money when the stock markets drop but have also experienced the upturns when those losses turn back into profit. The important thing to remember is that any profit or loss is only on paper until you actually sell. Or in the case of SAYE until you buy and then sell.

There is an issue with the lack of interest on your savings with the RM SAYE scheme, something that I pointed out when the plans were first announced. Especially as HMRC rules state that interest and/or terminal bonus can be added. I have still to find out why RM are not offering that.

Personally I see SAYE as a bit of a punt. Yes I might lose a bit of potential interest, although that won’t be much based on what I applied to save per week. And you can argue that as the interest rates on savings are generally lower than inflation, your money is actually going down in value anyway.

But there is always that possibility of making a nice little profit even with the current price being around £4.00 per share. At that price, a £10 per week saving would still make a profit of £160 or 11.11% tax free over the 3 year period. Minus selling costs.

[Judgee]

Too late now but those who opted in to the SAYE scheme may soon be regretting doing so.

Idiot child did you even read what the SAYE involves? As TBT says worse case scenario you lose peanuts in interest and you can pull your savings out at anytime. Hardly going to cause mass regret and suicides across the work force!

There's no need for the "Idiot child" insult.
If, as is now quite possible, you "won't make anything" then you will lose the interest that you would have made if you had invested the money elsewhere.

My apologies LL, where I come from the phrase "idiot child" is used as a bit of a tease rather than major insult.

[El-Bandito]

I told you months ago that the share price would get to around £6. Max £6.15. The SAYE plus,the half year profits announcement,will get the share price back up. There will be NO way it will get back to £6.15 within the next 6 months, unless the £ takes a dive against the Dollar/Euro. Then you can watch as the vultures start swooping for the kill. Privatisation don't you just love it?
0 hour contracts anyone?

[Sidley]

So with no guarantee of shares at the end and a gamble as to whether the share price will rise or fall this looks like an interest free loan to a bunch of crooked bastards who will work us into an early grave and screw us over given the chance.

Where do I sign?

[foxyjarvis]

SAYE- 3 yrs saving, zero interest for the right to buy at £3.60.
Or, if ur bullish and have the spare cash, you could buy in the market now at £4 with dividends of circa 75 pence over the next 3 yrs. Net outlay, £3.25(plus any property windfall payments)
Just SAYE NO!

[RobertT]

So with no guarantee of shares at the end

Whether a SAYE saver buys shares will be totally up to them.

and a gamble as to whether the share price will rise or fall

That's shares for you!

this looks like an interest free loan to a bunch of crooked bastards who will work us into an early grave and screw us over given the chance.

The money saved will go into an account with Lloyds Bank, RM will not see a penny of it.

[IloveMYredTROLLEY!]

This low will be nothing compared to what I think will happen if the overtime/PT holiday backpay hits home!

[Rommagic]

£3.92 at the moment.

[TrueBlueTerrier]