Lloyds Bank privatisation

Discussion in 'Trade Journals & Stock Tips' started by DangerSuit, Apr 5, 2016.

  1. DangerSuit

    DangerSuit Member

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    Anyone getting involved with this when it eventually happens? I'm thinking this could be a tidy little earner if it all goes correctly.

    For information - Lloyds was bailed out by the UK Government who has held shares in the company for years now. The treasury has finally got its act together and is about ready to sell off these shares, but they want to do so in order that they are spread more evenly amongst the population, rather than all being bought up by hungry hedge funds. These are the rules:


    • [h=3]Anyone applying for less than £1,000 worth of Lloyds shares in the share sale will be given priority.[/h]
    • [h=3]Applicants who hold their shares for more than a year will receive a bonus share for every 10 shares they buy, up to a value of £200.[/h]
    • [h=3]Members of the public will be offered a discount of 5% of the market price.[/h]
    So, will any Brits on here be taking up the offer? Does anyone see any potential pitfalls?
     
  2. GiltEdged

    GiltEdged Active Member

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    My broker hasn't got in touch with details of how they are handling it yet, but it is certainly something I am looking at. At 5% discount and possible £200 in bonus shares at the end of a year, it looks like a good investment, at least initially.

    I think making sure that the shares are spread out rather than going to big investors is an interesting idea, but I doubt it will work. I can see a lot of people holding onto their shares for one year to get the extra, and then selling on at which point the shares will begin to consolidate into the finance house's hands again. I do suspect the bonus shares will knock the shareprice down when they are issued, making it easier for the bulk purchasers.
     
  3. Corzhens

    Corzhens Senior Investor

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    My husband used to have an account with Lloyds Bank. In fact, he still has the check booklet as a souvenir. I didn't know that it had gone to the dumps and was rescued by the government. I think that is a good idea to spread out the ownership of the bank since more owners would mean more support. Maybe they should put a cap in the purchase of shares so that it can be spread to the population pretty well. I'm sure there are so many interested buyers of shares of Lloyds Bank.
     
  4. crimsonghost747

    crimsonghost747 Senior Investor

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    I've got mixed feelings about these. First of all, why is the government allowed to discriminate between large and small investors? The whole bonus share thing... well I assume that the government will keep some shares and then hand those out after one year so that system won't affect the existing shareholders.

    It's not a bad deal for individuals but feels like it's the government messing with the free market again. It's good that they encourage investing but I'm not sure if this is the right way to do it.
     
  5. DangerSuit

    DangerSuit Member

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    I get what you're saying here, but I would argue that letting the market run free was what got Lloyds into their little mess in the first place. Sometimes a little heavy-handed regulation can be a good thing, and if we truly trust in the markets, we can feel secure in the knowledge that they will right whatever wrongs the government's interference produce in good time.
     

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