Free Money
I enjoyed this tongue-in-cheek article by Giles Coren in the Times - about his efforts to make a quick from the flotation of shares in the Royal Mail.
In times gone by I might have considered this to be in rather bad taste, but then I read the comments of the leader of the Communisation Workers Union (CWU) - Billy Hayes - who is reported as saying:
"Why not [take the money and then go on strike]? These executives make big killings and run down a service. It's about greed.
"There's no celebrations in delivery offices throughout the country. We have got Sovereign wealth funds. Kuwait has bought shares in Royal Mail, Singapore has bought shares. We're going to have a situation where the royal family in Kuwait has more influence over the postal service in the UK than the royal family in this country."
Apparently a total of 149,632 postal workers – equivalent to 99.75 per cent – have been given £2,200 worth of free shares as part of the privatisation of the Royal Mail which are now worth a lot more obviously - in fact around £450 million
The CWU will announce the result of its strike ballot new Wednesday although the union leadership says that free shares for the workforce will not influence the outcome.
Probably not, but I am still reminded of all the people of a 'leftwing' persuasion in the 1980s - who swore blind that they would never buy their council house, yet in so many cases ended up doing so - often buying up their mum's or dad's as well houses, as I recall.
My Royal Mail fortune gets lost in the post
By Giles Coren
These shares are free money, I thought. I’ll fill my boots. Yet somehow it didn’t quite work out like that
As I write, at half past nine on Friday morning, the price of a single share in the Royal Mail — which I have been watching constantly since the market opened — stands at 446p. The initial flotation price having been set at 330p, that ought to mean that in the 90 minutes since trading began, I have made . . . hang on . . . £45,000 by 330p so 13,636 shares, times . . . yadda yadda, carry the two, divided by tum tum tum . . . £15,817.76. Just shy, in other words, of sixteen grand. A profit on my investment of almost exactly a third. If it goes on like this, I will have enough cash by the middle of next week to buy this newspaper and sack everybody on it who has ever been mean to me, which is exactly what money is for.
Except there is a flaw. It lies in the “ought to” up there in my second sentence. I ought to have made sixteen grand in the last hour and a half (the price has gone up to 447.13p since I opened this bracket), but as far as I can tell from a brief perusal of my portfolio online, it has not quite panned out like that.
Up until the middle of Thursday, all was looking well. I had been planning my assault on the first big privatisation in a generation for weeks, gradually building my position, getting the family involved, getting up to my armpits in share options.
I wasn’t in right from the very beginning, because at the beginning I was not impressed by the issue. “Shares in the Royal Mail!” I scoffed to the postman on my doorstep one morning in early September. “The very thought of it! Why, you have been all but killed by the internet. Your business is as doomed as mine is. Postmen and journalists, we’re finished, aren’t we? I’d as soon buy shares in the Royal Mail as in a newspaper. Or indeed a chain of blacksmiths.”
“Actually,” he said, looking a little hurt, “we deliver an enormous proportion of the UK’s parcels, the exact percentage escapes me, and I personally believe that the more shopping is done online, the more our parcel service is going to grow and profit. I have been offered a chunk of shares myself, and I plan to tuck in heavily. It is a way to take advantage of the great online retail shift without actually backing some dodgy tech company.”
Inside information. The shares were going to go through the roof, and only I and my postie knew. It was going to be like the Klondike. I trembled with excitement.
“We’re going to be rich, darling!” I cried, running into the house and firing up my laptop to invest the whole of my 2013 ISA allowance in the flotation. “Have you done your ISA yet, like I keep telling you?”
“No,” she replied. “Have you noticed I have two children under three? I’ll get round to it when they go to university.”
My wife does not understand money. She keeps hers in a savings account. A savings account! At a time when interest is zilch, borrowing is cheap, the economy is recovering and the stock market is booming, it’s like she’s being robbed at gunpoint while she sleeps.
“But it’s free money!” I wailed from the kitchen, where I was frantically offloading some rubbish Russian funds that have not survived the Chinese slowdown from my self-invested pension and using the capital to apply for another chunk of the Royal Mail. “The price will rocket to 600p on the first morning and your money will be doubled.”
“No such thing as free money,” she said.
“There is this time,” I said and immediately logged on to Santander to empty out the “available funds” pot of my mortgage for my next Royal Mail application, along with several thousand borrowed from my company (which was not permitted to invest itself for some totally unfair reason), which would have to be paid back before the end of the tax year or I’d go to prison for misappropriation of directorial whatnots.
As the days passed, I became obsessed. When people asked what I was doing, I waxed cagey, not wanting word about the free money to get out and create competitors I did not need. “I’m investing in cheese,” I would say, and change the subject.
In for 45K by the beginning of this week, I found that the market was getting ever more confident and decided to invest my children’s Junior ISAs in the issue. But when I logged on to Kitty’s account I was told: “Sorry, as you are under 18 your application has been unsuccessful.”
“Hmmm,” I said. “Seeing as, if you think I am Kitty, I am only two and half, I think that’s a bit of an abrupt way to break it to me. But fair enough.”
I ran into Esther’s room. “Disaster!” I cried. “Kitty and Sam aren’t allowed. Have you done that ISA yet?”
“I did try,” she said. “But I was kept on hold so long that I gave up.”
Oh no! Word was out. Other people were buying, too. This could dilute my shares or make them go down or something. And now Esther was frozen out for ever. She would be ruined.
“When I said ‘all my worldly goods’ in the vows,” I told her, “I hope you know that didn’t include my Royal Mail shares becoming yours in the event of you’re being TOO LAZY TO BUY ANY YOURSELF?”
“Wevs,” she said, and went back to doing totally unprofitable things with mashed carrots and cream cheese.
In the middle of Tuesday night I woke from a nightmare in which I had unwittingly purchased the entire flotation and was now in sole charge of the Post Office. The whole workforce had come out on strike and I didn’t know what I was supposed to do with all the letters to Santa.
“Do I reply to them?” I said to Esther, shaking her awake. “Or am I supposed to send presents? How can I buy presents without selling the shares? If I sell the shares, do I still have to buy the presents?”
On Wednesday I read that the offer was already oversubscribed by a factor of seven, so I reckoned that I’d probably get a seventh of my application, about £6,500. And I was happy because I’d started to worry about the price maybe going down.
On Thursday, they said that nobody who applied for more than £10,000 of shares would get any at all.
“****ing communists!” I roared. “Maggie will be turning in her grave!”
These shares are free money, I thought. I’ll fill my boots. Yet somehow it didn’t quite work out like that
As I write, at half past nine on Friday morning, the price of a single share in the Royal Mail — which I have been watching constantly since the market opened — stands at 446p. The initial flotation price having been set at 330p, that ought to mean that in the 90 minutes since trading began, I have made . . . hang on . . . £45,000 by 330p so 13,636 shares, times . . . yadda yadda, carry the two, divided by tum tum tum . . . £15,817.76. Just shy, in other words, of sixteen grand. A profit on my investment of almost exactly a third. If it goes on like this, I will have enough cash by the middle of next week to buy this newspaper and sack everybody on it who has ever been mean to me, which is exactly what money is for.
Except there is a flaw. It lies in the “ought to” up there in my second sentence. I ought to have made sixteen grand in the last hour and a half (the price has gone up to 447.13p since I opened this bracket), but as far as I can tell from a brief perusal of my portfolio online, it has not quite panned out like that.
Up until the middle of Thursday, all was looking well. I had been planning my assault on the first big privatisation in a generation for weeks, gradually building my position, getting the family involved, getting up to my armpits in share options.
I wasn’t in right from the very beginning, because at the beginning I was not impressed by the issue. “Shares in the Royal Mail!” I scoffed to the postman on my doorstep one morning in early September. “The very thought of it! Why, you have been all but killed by the internet. Your business is as doomed as mine is. Postmen and journalists, we’re finished, aren’t we? I’d as soon buy shares in the Royal Mail as in a newspaper. Or indeed a chain of blacksmiths.”
“Actually,” he said, looking a little hurt, “we deliver an enormous proportion of the UK’s parcels, the exact percentage escapes me, and I personally believe that the more shopping is done online, the more our parcel service is going to grow and profit. I have been offered a chunk of shares myself, and I plan to tuck in heavily. It is a way to take advantage of the great online retail shift without actually backing some dodgy tech company.”
Inside information. The shares were going to go through the roof, and only I and my postie knew. It was going to be like the Klondike. I trembled with excitement.
“We’re going to be rich, darling!” I cried, running into the house and firing up my laptop to invest the whole of my 2013 ISA allowance in the flotation. “Have you done your ISA yet, like I keep telling you?”
“No,” she replied. “Have you noticed I have two children under three? I’ll get round to it when they go to university.”
My wife does not understand money. She keeps hers in a savings account. A savings account! At a time when interest is zilch, borrowing is cheap, the economy is recovering and the stock market is booming, it’s like she’s being robbed at gunpoint while she sleeps.
“But it’s free money!” I wailed from the kitchen, where I was frantically offloading some rubbish Russian funds that have not survived the Chinese slowdown from my self-invested pension and using the capital to apply for another chunk of the Royal Mail. “The price will rocket to 600p on the first morning and your money will be doubled.”
“No such thing as free money,” she said.
“There is this time,” I said and immediately logged on to Santander to empty out the “available funds” pot of my mortgage for my next Royal Mail application, along with several thousand borrowed from my company (which was not permitted to invest itself for some totally unfair reason), which would have to be paid back before the end of the tax year or I’d go to prison for misappropriation of directorial whatnots.
As the days passed, I became obsessed. When people asked what I was doing, I waxed cagey, not wanting word about the free money to get out and create competitors I did not need. “I’m investing in cheese,” I would say, and change the subject.
In for 45K by the beginning of this week, I found that the market was getting ever more confident and decided to invest my children’s Junior ISAs in the issue. But when I logged on to Kitty’s account I was told: “Sorry, as you are under 18 your application has been unsuccessful.”
“Hmmm,” I said. “Seeing as, if you think I am Kitty, I am only two and half, I think that’s a bit of an abrupt way to break it to me. But fair enough.”
I ran into Esther’s room. “Disaster!” I cried. “Kitty and Sam aren’t allowed. Have you done that ISA yet?”
“I did try,” she said. “But I was kept on hold so long that I gave up.”
Oh no! Word was out. Other people were buying, too. This could dilute my shares or make them go down or something. And now Esther was frozen out for ever. She would be ruined.
“When I said ‘all my worldly goods’ in the vows,” I told her, “I hope you know that didn’t include my Royal Mail shares becoming yours in the event of you’re being TOO LAZY TO BUY ANY YOURSELF?”
“Wevs,” she said, and went back to doing totally unprofitable things with mashed carrots and cream cheese.
In the middle of Tuesday night I woke from a nightmare in which I had unwittingly purchased the entire flotation and was now in sole charge of the Post Office. The whole workforce had come out on strike and I didn’t know what I was supposed to do with all the letters to Santa.
“Do I reply to them?” I said to Esther, shaking her awake. “Or am I supposed to send presents? How can I buy presents without selling the shares? If I sell the shares, do I still have to buy the presents?”
On Wednesday I read that the offer was already oversubscribed by a factor of seven, so I reckoned that I’d probably get a seventh of my application, about £6,500. And I was happy because I’d started to worry about the price maybe going down.
On Thursday, they said that nobody who applied for more than £10,000 of shares would get any at all.
“****ing communists!” I roared. “Maggie will be turning in her grave!”
