Barclays shares are now down 10%.
This is the largest fall in nearly a year.
I wonder where bottom is?
This is the largest fall in nearly a year.
I wonder where bottom is?
Showing posts with label shares. Show all posts
Showing posts with label shares. Show all posts
Thursday, June 28, 2012
Wednesday, May 23, 2012
The Faecesbook Clusterfuck - The IPO That Just Keeps Giving
The clusterfuck IPO of Facebook last week is an IPO that, for those who haven't touched these shares with a bargepole, that just keeps giving.
Unsurprisingly these massively overvalued shares fell again yesterday, by 9%. However, Faecesbook mission to "find bottom" in the market is far from over.
The BBC reports that the SEC and Financial Industry Regulatory Authority (FINRA) are concerned about the way advisers disclosed information to investors, and may review the disclosure process to see if some investors got favourable access.
Reuters and the Wall Street Journal reported that Faecesbook's advisers may have revised their financial forecasts, but that only selected investors were told.
Oops, how very remiss of them!
Morgan Stanley said that the bank had:
Rest assured, the Faecesbook clusterfuck will run and run!
Unsurprisingly these massively overvalued shares fell again yesterday, by 9%. However, Faecesbook mission to "find bottom" in the market is far from over.
The BBC reports that the SEC and Financial Industry Regulatory Authority (FINRA) are concerned about the way advisers disclosed information to investors, and may review the disclosure process to see if some investors got favourable access.
Reuters and the Wall Street Journal reported that Faecesbook's advisers may have revised their financial forecasts, but that only selected investors were told.
Oops, how very remiss of them!
Morgan Stanley said that the bank had:
"followed the same procedures for the Facebook offering that it follows for all initial public offerings".In other news, Philip Goldberg (a private investor) has issued a writ against Nasdaq over technical problems on Friday that made a shambles of disrupted Faecesbook's first trading day.
Rest assured, the Faecesbook clusterfuck will run and run!
Monday, May 21, 2012
Faecesbook Shares Tanking
In the event that anyone is interested, shares in Facebook are tanking; they are currently trading at around $33 compared to its offer price of $38 and Friday high of $45.
Friday's IPO was severely marred by the failure of Nasdaq to do what it was meant to do, ie provide up to date price and trade information, instead it wallowed in 2 hour trade confirmation delays.
Now that the technical "snafu" has been sorted, and Morgan Stanley have stopped supporting the price, people have woken up to the fact that Faecesbook was massively overpriced.
No surprises there then!
Friday's IPO was severely marred by the failure of Nasdaq to do what it was meant to do, ie provide up to date price and trade information, instead it wallowed in 2 hour trade confirmation delays.
Now that the technical "snafu" has been sorted, and Morgan Stanley have stopped supporting the price, people have woken up to the fact that Faecesbook was massively overpriced.
No surprises there then!
Wednesday, June 2, 2010
BP Falls
As BP continues to fail to plug the oil spill in the US, its share price continues to fall. It has lost approximately 30% of its value in 6 weeks.
Eric Holder, the US Attorney-General, has announced that there will be a criminal and civil investigation to be conducted by the FBI and other federal agencies.
It is likely that if/as the share price continues to fall, BP will become a takeover target. Cynics are also suggesting that its US operations, despite (or maybe because of?) a very publicly hostile US administration, will become US owned.
As the old saying goes, never miss an opportunity to use a crisis to your own ends!
Eric Holder, the US Attorney-General, has announced that there will be a criminal and civil investigation to be conducted by the FBI and other federal agencies.
It is likely that if/as the share price continues to fall, BP will become a takeover target. Cynics are also suggesting that its US operations, despite (or maybe because of?) a very publicly hostile US administration, will become US owned.
As the old saying goes, never miss an opportunity to use a crisis to your own ends!
Wednesday, January 27, 2010
Unite Tries To Hold Back The Tide
Unite, the union that represents Cadbury employees, is rightly worried that the proposed leveraged takeover of Cadbury by Kraft may lead to job losses in the UK.
Aside from organising a rather futile employee protest in Bournville, the home of Cadbury, today the union says that Kraft must give assurances that the interests of the workforce will not be swept aside in the deal, and that the quality of the products will be safeguarded.
Or what?
What exactly will Unite do, or be able to do, if Kraft doesn't give these assurances?
It is powerless to stop this, and its "demands" as empty and as meaningless as Gordon Brown's promise last week to do everything possible to protect Cadbury jobs.
At best, all that will happen will be that Kraft issue some form of nicely worded soothing message that will not be worth the paper it is printed on.
The only way to stop this is if the shareholders vote it down, which they won't do. As I noted last week, hedge funds snapped up a large number of shares in Cadbury in Q4 2009 when news of the possible takeover came out. They have no loyalty to either the company or the workforce.
Aside from organising a rather futile employee protest in Bournville, the home of Cadbury, today the union says that Kraft must give assurances that the interests of the workforce will not be swept aside in the deal, and that the quality of the products will be safeguarded.
Or what?
What exactly will Unite do, or be able to do, if Kraft doesn't give these assurances?
It is powerless to stop this, and its "demands" as empty and as meaningless as Gordon Brown's promise last week to do everything possible to protect Cadbury jobs.
At best, all that will happen will be that Kraft issue some form of nicely worded soothing message that will not be worth the paper it is printed on.
The only way to stop this is if the shareholders vote it down, which they won't do. As I noted last week, hedge funds snapped up a large number of shares in Cadbury in Q4 2009 when news of the possible takeover came out. They have no loyalty to either the company or the workforce.
Tuesday, January 19, 2010
Cadbury Kowtow To Kraft
The board of Cadbury have accepted Kraft's 840p offer.
Cadbury chairman, Roger Carr, is quoted on Citywire:
"We believe the offer represents good value for Cadbury shareholders and are pleased with the commitment that Kraft Foods has made to our heritage, values and people throughout the world."
Doubtless the board would not have given in if they did not believe that they had the support of key shareholders. It should be noted that, when details of an initial offer were made public in September, hedge funds were more than keen to snap up shares in Cadbury.
However, whether all the shareholders are as happy with the deal remains to be seen.
The board were also advised by the banks that they would not achieve a better deal. It should also be noted that, on the assumption that the deal goes ahead, the banking advisers to Cadbury and Kraft will reap a windfall of £150M.
However, the support of the workforce is not guaranteed, given what Kraft's plans may actually be for the future of Cadbury.
Gordon Brown, fearful of his re-election prospects, made a grab for the headlines by saying:
"We are determined that the levels of investment that take place in Cadbury in the United Kingdom are maintained and we are determined that, at a time when people are worried about their jobs, that jobs in Cadbury can be secure."
All very nice and voter friendly, but there is nothing that he can do to stop Kraft doing whatever they wish with the company once they take ownership of it.
Cadbury chairman, Roger Carr, is quoted on Citywire:
"We believe the offer represents good value for Cadbury shareholders and are pleased with the commitment that Kraft Foods has made to our heritage, values and people throughout the world."
Doubtless the board would not have given in if they did not believe that they had the support of key shareholders. It should be noted that, when details of an initial offer were made public in September, hedge funds were more than keen to snap up shares in Cadbury.
However, whether all the shareholders are as happy with the deal remains to be seen.
The board were also advised by the banks that they would not achieve a better deal. It should also be noted that, on the assumption that the deal goes ahead, the banking advisers to Cadbury and Kraft will reap a windfall of £150M.
However, the support of the workforce is not guaranteed, given what Kraft's plans may actually be for the future of Cadbury.
Gordon Brown, fearful of his re-election prospects, made a grab for the headlines by saying:
"We are determined that the levels of investment that take place in Cadbury in the United Kingdom are maintained and we are determined that, at a time when people are worried about their jobs, that jobs in Cadbury can be secure."
All very nice and voter friendly, but there is nothing that he can do to stop Kraft doing whatever they wish with the company once they take ownership of it.
Tuesday, December 8, 2009
Northern Rock Shareholders To Receive Nothing
Andrew Caldwell, the BDO valuations partner, has issued a consultaiton document outlining his provisional views on the Northern Rock valuation, and on the amount of any compensation that may be payable to former shareholders.
Former shareholders, seemingly, can expect to receive nothing.
Shareholders have, since the inception of the valuation exercise, argued that treating Northern Rock as if it were not a going concern (before the government rescue) would quite clearly result in a zero valuation on their shares.
Whilst their anger may be understandable, if Northern Rock were a going concern at that time why did it need government help and would it have survived without it?
Former shareholders, seemingly, can expect to receive nothing.
Shareholders have, since the inception of the valuation exercise, argued that treating Northern Rock as if it were not a going concern (before the government rescue) would quite clearly result in a zero valuation on their shares.
Whilst their anger may be understandable, if Northern Rock were a going concern at that time why did it need government help and would it have survived without it?
Tuesday, November 24, 2009
Lloyds Takes More Taxpayer Money
Lloyds Banking Group, the once proud bank that was wrecked by Gordon Brown when he persuaded its board to take over the toxic HBOS, is draining the taxpayer of even more money today.
Lloyds is raising £13.5BN via a rights issue. As such the government will be pumping another £5.7BN of our money into the bank, in order to maintain our current holding of 43%.
Lloyds wants the money so that it can avoid participating in the government insurance scheme for its bad debt.
The scheme would have protected Lloyds against worse than expected losses on its toxic assets. However, the government would have demanded a greater share in the bank in return.
I am sure Lloyds now bitterly regrets ever allowing itself to be persuaded by Brown to takeover HBOS.
Lloyds is raising £13.5BN via a rights issue. As such the government will be pumping another £5.7BN of our money into the bank, in order to maintain our current holding of 43%.
Lloyds wants the money so that it can avoid participating in the government insurance scheme for its bad debt.
The scheme would have protected Lloyds against worse than expected losses on its toxic assets. However, the government would have demanded a greater share in the bank in return.
I am sure Lloyds now bitterly regrets ever allowing itself to be persuaded by Brown to takeover HBOS.
Monday, October 26, 2009
Banking Bonuses
The Conservative Shadow Chancellor, George Osborne, is calling on the government and the Financial Services Authority to ban large cash bonuses for retail bankers; he wants cash bonuses capped at £2K, with the rest of the bonus paid in the form of shares.
The theory being that the £20BN saved could be lent to consumers and businesses.
Fat chance!
Osborne laid out his views at a Reuters, in Canary Wharf.
The cap would only apply to High Street retail banks, and the investment arms of banks that also lend to consumers.
All very well.
However, the dilution of shareholdings (as a result of the issuance of new shares in lieu of bonuses) will not necessarily please the shareholders.
I would also remind the Tories that one of the route causes of well publicised spectacular frauds, such as Enron, was rewarding executives with shares in the company. This provided them with a massive incentive to talk/manipulate the performance of the company up, in order to increase the value of their shares.
The theory being that the £20BN saved could be lent to consumers and businesses.
Fat chance!
Osborne laid out his views at a Reuters, in Canary Wharf.
The cap would only apply to High Street retail banks, and the investment arms of banks that also lend to consumers.
All very well.
However, the dilution of shareholdings (as a result of the issuance of new shares in lieu of bonuses) will not necessarily please the shareholders.
I would also remind the Tories that one of the route causes of well publicised spectacular frauds, such as Enron, was rewarding executives with shares in the company. This provided them with a massive incentive to talk/manipulate the performance of the company up, in order to increase the value of their shares.
Wednesday, June 10, 2009
Rip Off Britain
Selftrade, the online stockbroker, has added its name to the financial services industry hall of shame for ripping customers off.
As from 1 July this year, it will charge its hapless customers an annual management fee of £40. They are taking advantage of the fact that their rules mean in order to transfer stocks some customers could be charged as much as £100, ie their customers are locked in and ripe for being ripped off.
My advice to its customers is to sell your shares before 1 July, and look for a better deal before buying back into the market (if this is financially feasible without losing more than the £40 charge).
Don't let Selftrade get away with it.
As from 1 July this year, it will charge its hapless customers an annual management fee of £40. They are taking advantage of the fact that their rules mean in order to transfer stocks some customers could be charged as much as £100, ie their customers are locked in and ripe for being ripped off.
My advice to its customers is to sell your shares before 1 July, and look for a better deal before buying back into the market (if this is financially feasible without losing more than the £40 charge).
Don't let Selftrade get away with it.
Monday, December 1, 2008
London Scottish Fails
London Scottish Bank (LSB) went into administration this morning.
LSB specialises in offering fixed rate savings accounts and loans to customers with poor credit histories.
Its structure was somewhat top heavy, it had only 10,000 savers, £250M in deposits but employed 700 people.
In the six months to April 2008, it made a loss of £7.4M.
The Treasury issued a statement guaranteeing all deposits (even those above the FSCS £50K limit):
"The Chancellor has put in place arrangements to ensure that all eligible retail depositors in London Scottish Bank will receive their money in full, including those with balances above the current 50,000 pound FSCS limit."
Shares were suspended at 2.62p.
LSB specialises in offering fixed rate savings accounts and loans to customers with poor credit histories.
Its structure was somewhat top heavy, it had only 10,000 savers, £250M in deposits but employed 700 people.
In the six months to April 2008, it made a loss of £7.4M.
The Treasury issued a statement guaranteeing all deposits (even those above the FSCS £50K limit):
"The Chancellor has put in place arrangements to ensure that all eligible retail depositors in London Scottish Bank will receive their money in full, including those with balances above the current 50,000 pound FSCS limit."
Shares were suspended at 2.62p.
Wednesday, November 26, 2008
Woolies Suspended
The Times reports that shares in Woolworths have been suspended at 1.22p this morning, as the company attempts to conclude talks to sell its 840 store retail business.
Hilco are understood to be prepared to buy the retail division for £1. However, the banks that Woolies owes money to are less than happy with the possible losses arising on such a deal.
Added to the problems that Woolies faces, in trying to secure a deal, is funding the wage bill and continuing to trade "solvently". The directors are under a legal obligation to trade solvently, in the event that Woolies becomes "insolvent" (ie the banks refuse to provide any more working capital) then the company will be forced into administration thus threatening 30,000 jobs.
In the "good old days" of "privately" owned banks (ie before the banks went cap in hand to the government for a bailout) the banks would have only themselves and their "consciences" to answer to wrt pushing a company in administration.
However, now that they are semi nationalised, for them to force 30,000 people onto the dole queue in this manner would be a tad "politically unwise" to say the least.
That being said the banks are very capable of making a very foolish decision and consigning Woolies to the dustbin of history, were they to do so they would be signing their own death warrants.
Hilco are understood to be prepared to buy the retail division for £1. However, the banks that Woolies owes money to are less than happy with the possible losses arising on such a deal.
Added to the problems that Woolies faces, in trying to secure a deal, is funding the wage bill and continuing to trade "solvently". The directors are under a legal obligation to trade solvently, in the event that Woolies becomes "insolvent" (ie the banks refuse to provide any more working capital) then the company will be forced into administration thus threatening 30,000 jobs.
In the "good old days" of "privately" owned banks (ie before the banks went cap in hand to the government for a bailout) the banks would have only themselves and their "consciences" to answer to wrt pushing a company in administration.
However, now that they are semi nationalised, for them to force 30,000 people onto the dole queue in this manner would be a tad "politically unwise" to say the least.
That being said the banks are very capable of making a very foolish decision and consigning Woolies to the dustbin of history, were they to do so they would be signing their own death warrants.
Tuesday, September 23, 2008
The Dead Cat Bounce II
Lats week I wrote about the rebound in shares, in response to the US bailout of the financial system, being a "dead cat bounce".
It would seem that I was right.
Shares in London and Asia have fallen sharply, as doubts grow about whether the $700BN bailout will work. At the time of writing:
-The FTSE is down 2%
-The CAC down over 1%
-The MSCI index of Asia-Pacific shares (excluding Japan) down 2%
-The Dow down over 3%
The package proposed by Henry Paulson, US Treasury Secretary, is expected to face opposition from members of Congress about how to pay for the plan.
Additionally, other American industries outside Wall Street have begun to ask for similar assistance; eg bans on short-selling have been requested by car and real estate companies.
Senator Richard Shelby, the leading Republican on the Senate Committee on Banking, Housing and Urban Affairs, said in a statement yesterday that the proposal was "neither workable nor comprehensive".
"I am concerned that the Treasury's proposal is neither workable nor comprehensive, despite its enormous price tag. In my judgment, it would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted, and may actually cause the Government to revert to an inadequate strategy of ad hoc bailouts.
Given that markets have recently taken confidence in the prospect of government involvement, I believe Congress must immediately undertake a comprehensive, public examination of the problem and alternative solutions rather than swiftly pass the current plan with minimal changes or discussion. We owe the American taxpayer no less."
That is all very well, but the issue is one of confidence. A lengthy review will sap the confidence and destroy the financial system before any "cure" is discovered.
I noted last week:
"The actions taken may well soften the blow from the fallout of the sub prime crisis. However, the market cannot be bucked. There is a massive repricing of risk being undertaken which will negatively impact the share prices of financial institutions and, by definition, their willingness and ability to take on risk.
No matter what governments do this repricing will happen and the effects will be felt by everyone, from the CEOs of the leading banks to the ordinary man in the street seeking credit to buy a car or home.
The market will not be bucked. The surge in share prices is in effect a dead cat bounce, not a long term rally."
The bailout will not stop shares falling, but it will stop the world wide financial system from collapsing by giving it a much needed boost of confidence.
Testing times require bold measures.
Now is not the time for dithering and navel gazing.
It would seem that I was right.
Shares in London and Asia have fallen sharply, as doubts grow about whether the $700BN bailout will work. At the time of writing:
-The FTSE is down 2%
-The CAC down over 1%
-The MSCI index of Asia-Pacific shares (excluding Japan) down 2%
-The Dow down over 3%
The package proposed by Henry Paulson, US Treasury Secretary, is expected to face opposition from members of Congress about how to pay for the plan.
Additionally, other American industries outside Wall Street have begun to ask for similar assistance; eg bans on short-selling have been requested by car and real estate companies.
Senator Richard Shelby, the leading Republican on the Senate Committee on Banking, Housing and Urban Affairs, said in a statement yesterday that the proposal was "neither workable nor comprehensive".
"I am concerned that the Treasury's proposal is neither workable nor comprehensive, despite its enormous price tag. In my judgment, it would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted, and may actually cause the Government to revert to an inadequate strategy of ad hoc bailouts.
Given that markets have recently taken confidence in the prospect of government involvement, I believe Congress must immediately undertake a comprehensive, public examination of the problem and alternative solutions rather than swiftly pass the current plan with minimal changes or discussion. We owe the American taxpayer no less."
That is all very well, but the issue is one of confidence. A lengthy review will sap the confidence and destroy the financial system before any "cure" is discovered.
I noted last week:
"The actions taken may well soften the blow from the fallout of the sub prime crisis. However, the market cannot be bucked. There is a massive repricing of risk being undertaken which will negatively impact the share prices of financial institutions and, by definition, their willingness and ability to take on risk.
No matter what governments do this repricing will happen and the effects will be felt by everyone, from the CEOs of the leading banks to the ordinary man in the street seeking credit to buy a car or home.
The market will not be bucked. The surge in share prices is in effect a dead cat bounce, not a long term rally."
The bailout will not stop shares falling, but it will stop the world wide financial system from collapsing by giving it a much needed boost of confidence.
Testing times require bold measures.
Now is not the time for dithering and navel gazing.
Friday, September 19, 2008
The Dead Cat Bounce
Share prices are surging today on reports of a massive bailout of toxic debt by the US government, coupled with the ban by the FSA on short selling of financial stocks.
At the time of writing, the FTSE is up over 7%, the DAX up by almost 4% and the CAC up by 6%.
Talks are being held between the US Treasury Department and the Federal Reserve to examine proposals to move illiquid toxic assets, backed by mortgage debt into a government backed vehicle; ie they will be taken out of the balance sheets of the banks and financial institutions that created them.
In the event that this this scheme is put into action, this will be the largest bailout in American history.
The actions taken may well soften the blow from the fallout of the sub prime crisis. However, the market cannot be bucked. There is a massive repricing of risk being undertaken which will negatively impact the share prices of financial institutions and, by definition, their willingness and ability to take on risk.
No matter what governments do this repricing will happen and the effects will be felt by everyone, from the CEOs of the leading banks to the ordinary man in the street seeking credit to buy a car or home.
The market will not be bucked. The surge in share prices is in effect a dead cat bounce, not a long term rally.
At the time of writing, the FTSE is up over 7%, the DAX up by almost 4% and the CAC up by 6%.
Talks are being held between the US Treasury Department and the Federal Reserve to examine proposals to move illiquid toxic assets, backed by mortgage debt into a government backed vehicle; ie they will be taken out of the balance sheets of the banks and financial institutions that created them.
In the event that this this scheme is put into action, this will be the largest bailout in American history.
The actions taken may well soften the blow from the fallout of the sub prime crisis. However, the market cannot be bucked. There is a massive repricing of risk being undertaken which will negatively impact the share prices of financial institutions and, by definition, their willingness and ability to take on risk.
No matter what governments do this repricing will happen and the effects will be felt by everyone, from the CEOs of the leading banks to the ordinary man in the street seeking credit to buy a car or home.
The market will not be bucked. The surge in share prices is in effect a dead cat bounce, not a long term rally.
Tuesday, September 9, 2008
London's Reputation Tarnished
London's reputation as the world's leading financial centre was further tarnished yesterday when the London Stock Exchange suffered its worst systems failure in eight years, forcing it to suspend trading for seven hours.
To add to the woes of those trying to trade yesterday the crash happened on what would have been one of the busiest days of the year, hot on the heels of the news over the weekend that Fannie Mae and Freddie Mac had been bailed out.
A cynic might argue that the system was deliberately shut down, so as to avoid a massive spike in bank shares occurring.
Reuters quoted one trader as saying:
"We have the biggest takeover in the history of the known world ... and then we can't trade. It's terrible."
Another said:
"This halt today clearly has once again damaged (the LSE's) reputation as a leading exchange, especially on a day like today, highlighting that it may have been unable to handle the volumes this morning."
The LSE have not given an explanation for the crash, traders though are demanding an explanation.
LSE Chief Executive Clara Furse wrote to the FT on Monday, somewhat ironically, and said that the system used by the LSE was "the cutting edge".
This is just one of a string of issues that has tarnished the City's reputation. Other include; the endowment scandal, fat cat bonuses for failed executives, Northern Rock, excess bank and credit card charges, the mortgage drought, mis-selling of mortgages, PPI mis-selling etc.
The great and the good of the City should bear in mind that reputations are hard to earn, but easy to lose.
To add to the woes of those trying to trade yesterday the crash happened on what would have been one of the busiest days of the year, hot on the heels of the news over the weekend that Fannie Mae and Freddie Mac had been bailed out.
A cynic might argue that the system was deliberately shut down, so as to avoid a massive spike in bank shares occurring.
Reuters quoted one trader as saying:
"We have the biggest takeover in the history of the known world ... and then we can't trade. It's terrible."
Another said:
"This halt today clearly has once again damaged (the LSE's) reputation as a leading exchange, especially on a day like today, highlighting that it may have been unable to handle the volumes this morning."
The LSE have not given an explanation for the crash, traders though are demanding an explanation.
LSE Chief Executive Clara Furse wrote to the FT on Monday, somewhat ironically, and said that the system used by the LSE was "the cutting edge".
This is just one of a string of issues that has tarnished the City's reputation. Other include; the endowment scandal, fat cat bonuses for failed executives, Northern Rock, excess bank and credit card charges, the mortgage drought, mis-selling of mortgages, PPI mis-selling etc.
The great and the good of the City should bear in mind that reputations are hard to earn, but easy to lose.
Thursday, July 10, 2008
Bradford & Bingley - The Plaything of Speculators
In echoes of Marconi and Northern Rock, Bradford & Bingley appears to have become the plaything of speculators as it desperately searches for a new CEO and for a white knight to buy it out.
B&B shares jumped more than 25% this morning, 9¼p to 43¼p, on hopes that it will be bought out.
Pundits believe that it is now likely that, barring further disasters, there will be a wind down or buy out.
The pundits fail to recognise the havoc that the speculators will wreak in the short term.
As a guide to the future, look at what happened to the share price of Marconi and Northern Rock.
B&B shares jumped more than 25% this morning, 9¼p to 43¼p, on hopes that it will be bought out.
Pundits believe that it is now likely that, barring further disasters, there will be a wind down or buy out.
The pundits fail to recognise the havoc that the speculators will wreak in the short term.
As a guide to the future, look at what happened to the share price of Marconi and Northern Rock.
Friday, July 4, 2008
Bradford and Bingley Woes
Bradford & Bingley (B&B) has plunged 15% to a new low of 52p this morning, after the US buyout firm TPG walked away from leading its restructured rights issue after Moody's downgraded B&B's credit rating for a second time last night.
This less than welcome news follows B&B's rejection of a proposal of 72p per share from Resolution two weeks ago.
The question that shareholders will be asking themselves is why did the board reject a 72p offer two weeks ago.
Could it be possible that the board of B&B know that the due diligence that Resolution would have carried out, would have found something that would have caused them to walk away as well?
This less than welcome news follows B&B's rejection of a proposal of 72p per share from Resolution two weeks ago.
The question that shareholders will be asking themselves is why did the board reject a 72p offer two weeks ago.
Could it be possible that the board of B&B know that the due diligence that Resolution would have carried out, would have found something that would have caused them to walk away as well?
Monday, June 2, 2008
Bradford and Bingley Collapses
US private equity firm Texas Pacific Group has agreed to take a 23% stake in Bradford & Bingley (B&B).
All shares will be issued at 55p, down from an initially planned 82p underwriting price.
The bank also warned on deteriorating economic conditions, with a decline in net interest margin and increasing arrears. Underlying profits for the first four months halved to 56 million pounds, it said.
B&B CEO, Steven Crawshaw, stepped down this weekend, citing cardiovascular problems.
Shares in B&B plummeted by almost 30% this morning at one point, forcing the FSA to briefly suspend trading as it announced the impact that bad debt has had on the business.
They are currently trading at 67p (down 23% on last week's closing).
All shares will be issued at 55p, down from an initially planned 82p underwriting price.
The bank also warned on deteriorating economic conditions, with a decline in net interest margin and increasing arrears. Underlying profits for the first four months halved to 56 million pounds, it said.
B&B CEO, Steven Crawshaw, stepped down this weekend, citing cardiovascular problems.
Shares in B&B plummeted by almost 30% this morning at one point, forcing the FSA to briefly suspend trading as it announced the impact that bad debt has had on the business.
They are currently trading at 67p (down 23% on last week's closing).
Monday, March 24, 2008
Vote of Confidence in HBOS
The BBC reports that senior management and staff at HBOS have bought over £6M of the bank's shares after a steep fall in the firm's share price last week.
The bank said the move was a "demonstration of confidence" after it was hit by "malicious rumours".
HBOS CEO, Andy Hornby, spent £414,000 of his annual bonus to buy 92,812 shares.
HBOS executive directors and 250 senior managers, purchased 1.4 million shares at 446.25p.
The bank said the move was a "demonstration of confidence" after it was hit by "malicious rumours".
HBOS CEO, Andy Hornby, spent £414,000 of his annual bonus to buy 92,812 shares.
HBOS executive directors and 250 senior managers, purchased 1.4 million shares at 446.25p.
Thursday, March 20, 2008
Scum!
Stock market manipulators (Scum!), tried yesterday to bring down HBOS by spreading a false rumour that HBOS had begged the Bank of England for an emergency loan.
This was vehemently denied by HBOS and Bank of England. However, the damage had been done and the share price fell by 17%; earning shorters a tidy sum.
The FSA said that it would pursue traders guilty of "market abuse".
The trouble is that these warnings come after the damage is done. The Bank of England and FSA need to get their acts together and work in a pro active rather than reactive fashion.
The Bank of England has said that it will double its weekly emergency funding to £10BN. When compared with the pro active approach taken by the Fed, this is a mere drop in the ocean and shows that the Bank of England has yet to "get" what is happening in the markets.
Unsurprisingly the UK's major financial institutions are highly unimpressed by the Bank of England's, and government's, handling of the crisis so far. As such, the chief executives of Halifax Bank of Scotland, Royal Bank of Scotland, Barclays, Lloyds TSB and HSBC have called for a meeting today with Mervyn King (Governor of The Bank of England) for an "exchange of views".
Let us hope that they are able to knock some sense into him.
The BoE, UK government and ECB simply do not "get" this yet.
They need to ditch their tired old mantras about "moral hazard" and inflation worries. These issues are dead and buried for the moment.
When you see your neighbour's house on fire, even if he started it himself, you don't sit back and do nothing. You help him put the fire out, before it reaches your house.
Only large scale co-ordinated efforts by the central banks (BoE/ECB etc), governments, and main banks will stabilise this situation.
Banks need to start lending to each other again; to do this they need to be given a guarantee by BoE/ECB et al that their funding etc will be underwritten. This means BoE et al need to be imaginative, as the Fed and US government has been.
The trouble is, they are simply not up to the job.
This was vehemently denied by HBOS and Bank of England. However, the damage had been done and the share price fell by 17%; earning shorters a tidy sum.
The FSA said that it would pursue traders guilty of "market abuse".
The trouble is that these warnings come after the damage is done. The Bank of England and FSA need to get their acts together and work in a pro active rather than reactive fashion.
The Bank of England has said that it will double its weekly emergency funding to £10BN. When compared with the pro active approach taken by the Fed, this is a mere drop in the ocean and shows that the Bank of England has yet to "get" what is happening in the markets.
Unsurprisingly the UK's major financial institutions are highly unimpressed by the Bank of England's, and government's, handling of the crisis so far. As such, the chief executives of Halifax Bank of Scotland, Royal Bank of Scotland, Barclays, Lloyds TSB and HSBC have called for a meeting today with Mervyn King (Governor of The Bank of England) for an "exchange of views".
Let us hope that they are able to knock some sense into him.
The BoE, UK government and ECB simply do not "get" this yet.
They need to ditch their tired old mantras about "moral hazard" and inflation worries. These issues are dead and buried for the moment.
When you see your neighbour's house on fire, even if he started it himself, you don't sit back and do nothing. You help him put the fire out, before it reaches your house.
Only large scale co-ordinated efforts by the central banks (BoE/ECB etc), governments, and main banks will stabilise this situation.
Banks need to start lending to each other again; to do this they need to be given a guarantee by BoE/ECB et al that their funding etc will be underwritten. This means BoE et al need to be imaginative, as the Fed and US government has been.
The trouble is, they are simply not up to the job.
