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Don’t have to be a genius to figure out that Royal Mail will be spun off from IDS once takeover goes through. Price… 50p -125p. Who the hell wants 150k employees!
Could do with some advice here I have roughly 3000 shares in royal mail .What advice would people in here sell now or keep a hold of them.
Henky "sell now or keep a hold of them"
Hold for sure!
Indeed Hold Henky
Henky - generally speaking never take advice from online forums :) but I see your message and although I'm not a poster in this forum im happy to share my opinion as if I were in your position.
You say you have 3000 shares so they are worth, what, about £9600 today at £3.20?
I am not fully over the details of the BID but I think it's worth about £3.60 max (if no more bids come)?
So that would be worth about £10,800, so another £1200.
The risk is if the bid falls apart this would tank back to 225 or below - so you seem to have an opportunity right now.
Personally then I would probably be happy with the £9600, and the key thing is what will you do with that money? If you need it for life stuff fine - but if you are able to reinvest it elsewhere then what opportunities are available?
It's your decision, but it seems you have already achieved a good return in my view.
Bigego
It could be argued that why would the SP tank if the bid failed
If a bid has been made at 370 than there must be clear evidence to the bidder that its worth it in the first place
Certainly it would slip but tank...absolutely not
Thanks for the advice that moneyshark boy is definitely not playing with a full deck
Thanks yk everybody who replied
Sure 'tank' is the wrong word - but the elevated value from the 'pre bid price' usually disappears if a bid fails - so dropping back to where it was should be expected.
The price might linger a bit between old and new zones on the hope of another bid - but if nothing else comes, then...
Or to be more blunt - the fact that the current market price is below the revised takeover offer price reflects the risk the market perceives in it completing.
Otherwise efficient market theory would tell you the market price should be exactly the offer price - if it was 100% in the bag that's the only logical price.
It's not. It's still down around 322 - hence some risk is being priced in.
What is the role of the board now, as they are minded to accept the bid
Will the board be doing the bidding on behalf of the DK
OR other way round , will the institutional shareholders, through the board be conveying the views to DK
OR will DK be talking directly to all institutional investors
If big institutional investor wants 4.10, another wants 4.20, another is happy with 3.90 example, does he get all the big shareholders in a room and hammer out a best price.
Or do the big institutional investors gang together , and pile the pressure on DK
INTERESTING FEW WEEKS
So it's easy to calculate where the value is, simple numbers dont know all the details on divs etc.
Assuming 322 now and 360 takeout, you can buy a share today and get an 11.8% return (360/322)
So to get an 11.8% gain you should accept a risk of at least the same amount, 11.8% which is about 38p on your 322 purchase, hence as long as bid failure keeps it above 284 you would have equalised opportunity and risk.
However as it was around 225 pre bid, 284 is clearly much higher, and therefore risk outweighs opportunity buying today at 322.
Big Ego "The risk is if the bid falls apart this would tank back to 225"
That's why you should never take advice at face value.
DK who doesn't spend his money freely has offered 370 this he knows would be a massive win at that price.
Here we are discussing the strong possibility that he won't get his way at that price.
A would be advisor now suggests it will tank to 225p 😂😂😂
TheMoneyShark "if it was 100% in the bag"
I am clearly reflecting in my comment that it is not a concrete offer by saying "if".
Redceo - no i actually think the bid will succeed.
Was just chewing the fat on purchasing today to benefit from the gap between 322 and takeout price.
Cool, I'll leave you all to it! Good luck all ;)
I never asked you .The question was to people on here who are normal