Registered: Apr 2002
Posts: 16541 - Threads: 780
OK, that was the first sale.
Shares were priced at 330p, the article states 546p but they went up to over 600p later. So a massive gain, right?
No. Not unless he sold at the top of the market.
Royal Mail shares are now at 390p, reflecting a value the accountants came up with originally. They knew mail services were reducing year on year and there were some difficult negotiations coming up. On the upside, Royal Mail does own a load of prime properties.
My guess is it was high interest and volumes which pushed the price up, institutions cashed in at the top which drove the price down.
Industrial disputes have driven the price lower, and more recently, a proposed pension deal wiped even more off the price.
Valuing a company is part science and part art. In this case, science won out as the current share price reflects a true value, with the likelihood of further falls as Royal Mail tries to compete with cheap companies who can cherry pick the best areas and services. Don't forget, like BT, Royal Mail has to provide post services to the whole country at a price which is fixed by law.
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