There are still people clinging to the absurd notion that RBS shares have been falling again because the ban on short selling was removed. Figures released show that no short positions were opened against RBS in the first three days after the lifting of the ban, yet the shares plunged downwards. Will these instant experts on this topic please look at the facts first?
The reason RBS shares have plunged again is primarily the company’s release of estimated figures for 2008. These showed an estimated loss of £8 billion, coupled with “impairment charges” (losses or write offs to anyone else) of £15-20billion! In other words the City forecast I have been using here for sometime of around £28billion of total losses gave people a good guide to the magnitude of their problems. Confirmation of this, allied to more sabre rattling about full nationalisation, was bound to flush out a few more shareholder sellers who had been a bit slow to realise just what a mess their bank was in.
PS: Can someone tell me why the taxpayer is underwriting the latest issue of RBS shares to replace the government’s Pref shares at the price of 31.75p, when the current share price is 12p?
Valuing RBS shares and paying sensible prices for them does not seem to be the government’s strong point.