Monday, November 19, 2007

Northern Rock offers to olow

It appears that the offers for Northern Rock are too low according to this beeb article

Northern Rock has said the proposals received so far from potential investors were "materially below" the stricken bank's current share price.

Well what do they expect, for fucks sake. The share price is artificially high because everyone expects the Govt to bail them out, so why sell now? Especially if you bought at the peak of £12, you may as well hang and see what happens. A quick look at share trading this morning shows volumes of 40,00 shares have traded, that's out of approximately 500,000,000 (I had to do some quick assumptions to get to this figure) or less that 0.08% of the shares so it is hardly a true indicator of what the company is worth.

This all goes down to the old adage of something is only worth what somebody is prepared to pay for it, which is how we got in to this mess in the first place with the overvalued load books.

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