Royal Mail float

[Euler]

Looks a bargain!

P/E ratio - 6.5 to 8.3
Expected dividend yield - 6.1pc to 7.7pc
Dividend cover - Two times
Interest cover - Four times
Leverage - 65pc

[switesh]

General question:
Am I right in thinking that IPO's are much more likely to be flipped for tech companies (because of hype & perception), than they are for business like this one that has are shall we say not 'cutting-edge'?

[Euler]

Royal Mail shares 'seven times over-subscribed'

No surprise really, just have to wait for a paltry allocation now. I would imagine you will see institutions buying in when it floats.

http://www.bbc.co.uk/news/business-24462388

[Lagos]

It will be interesting to see how they calculate the scaling back.
If you apply for £750 you may get the lot, but if you go for £50K it will probably be a fraction of that or maybe even nothing!

Mid point on the IG quote is up to £4.04 just hope I get a few.

[superfrank]

hardly surprising that they're massively over-subscribed given the current interest rate environment, and the fact that public assets have historically been sold off on the cheap.

investors have no cause for complaint - they've been given masses of public money (indirectly) since the financial crisis started.

[Euler]

Small investors will be favoured in the privatisation of the Royal Mail, at the expense of those seeking a large allocation, the BBC has learned.

Anyone who subscribed for the minimum entitlement of £750 will receive 100% of their application, according to BBC business editor Robert Peston.

But those who have applied for £10,000 worth of shares or more, will not receive any, he said.

http://www.bbc.co.uk/news/business-24471622

[andyfuller]

UPDATE 1740

The allocation of shares turns out to be very simple. If you've applied for up to £10,000 of shares, you will get £750 worth of shares. It is no more complicated than that.

And the appetite from investment institutions for these things turns out to be enormous. They put up money worth a staggering 20 times the value of the shares on offer to them.

So on my calculation, retail and institutional investors offered £27bn for shares priced at £1.7bn (as I mentioned earlier, retail investors offered 7 times the value of shares allocated to them).

The argument about whether Royal Mail was priced too cheaply will run and run.

http://www.bbc.co.uk/news/business-24470086

[Lagos]

There is something quite pleasing about that, everyone got the same unless you did multiple applications or were greedy.

[andyfuller]

Private investors cashing out - 49.2% of all trades in RMG so far today have been for 227 shares. Average price has been 445.15p

[hgodden]

There is something quite pleasing about that, everyone got the same unless you did multiple applications or were greedy.

Or unless you're a hedge fund and are allowed to shovel up loads of them. No wonder the city makes up nearly a third of tory funding

[Euler]

I think it's been interesting watching the debate about the float.

Lots of people saying don't buy it, it's ours already. But so is nearly £2Tr in liabilities but people don't seem to care much for taking responsibility for that side of the national balance sheet.

[superfrank]

How banks broke promises and raked in a £323m fortune
http://www.independent.co.uk/news/uk/ro ... 26885.html

...big investors who were offered extra shares in a “gentleman’s agreement” to stay in for the long term sold them almost instantly at a vast profit

every man and his dog knew that the shares were being sold on the cheap - the banks got preferential treatment and then flipped them. the City's "talent" is for lining their own pockets at the expense of taxpayers, real businesses and the real economy.