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Half a trillion AIB shares??

  • 01-11-2013 11:18pm
    #1
    Pat10
    Registered Users, Registered Users 2 Posts: 251 ✭✭


    I am a novice to the stock markets and have recently become interested in them. Could someone explain what is going on with aib shares? It has over 520 billion shares in issue today and had just 1 billion I think back in 2007. Will these shares remain indefinitely or will they somehow be reduced? Surely aib cannot have a future in the markets with this amount of shares. How did there come to be so many since 2007?


Comments

  • #2
    gordongekko
    Registered Users, Registered Users 2 Posts: 5,301 ✭✭✭gordongekko


    Pat10 wrote: »
    I am a novice to the stock markets and have recently become interested in them. Could someone explain what is going on with aib shares? It has over 520 billion shares in issue today and had just 1 billion I think back in 2007. Will these shares remain indefinitely or will they somehow be reduced? Surely aib cannot have a future in the markets with this amount of shares. How did there come to be so many since 2007?

    government pumped over €20 billion into aib. Google it and its all there.


  • #3
    Pennystockwhiz
    Registered Users, Registered Users 2 Posts: 59 ✭✭Pennystockwhiz


    both BOI and AIB completely diluted their shares to raise billions in capital.. AIB is 99.8% state owned


  • #4
    Pat10
    Registered Users, Registered Users 2 Posts: 251 ✭✭Pat10


    Can the irish government reduce the number of shares it has because lets face it no one investor is going to buy a decent chunk of aib with so many shares in issue. If the government was to reduce the number of shares how would it do it?


  • #5
    gordongekko
    Registered Users, Registered Users 2 Posts: 5,301 ✭✭✭gordongekko


    Pat10 wrote: »
    Can the irish government reduce the number of shares it has because lets face it no one investor is going to buy a decent chunk of aib with so many shares in issue. If the government was to reduce the number of shares how would it do it?

    would not make any difference. The market decides the price.

    If there are 1 million shares at €1 and they consolidate the shares to 500000 then in theory the share price should double to €2.

    Its the overall valuation you need to be concerned about not the number of shares in issue.


  • #6
    Pat10
    Registered Users, Registered Users 2 Posts: 251 ✭✭Pat10


    gordongekko wrote: »
    would not make any difference. The market decides the price.

    If there are 1 million shares at €1 and they consolidate the shares to 500000 then in theory the share price should double to €2.

    Its the overall valuation you need to be concerned about not the number of shares in issue.

    Do they call this a reverse split whereby the number of shares is reduced but the price rises proportional.? At the current number of shares they say the value per share is less than 1cent for a realistic market value. Will the governement do a float just like the british governement did with royal mail?


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  • #7
    gordongekko
    Registered Users, Registered Users 2 Posts: 5,301 ✭✭✭gordongekko


    Pat10 wrote: »
    Do they call this a reverse split whereby the number of shares is reduced but the price rises proportional.? At the current number of shares they say the value per share is less than 1cent for a realistic market value. Will the governement do a float just like the british governement did with royal mail?

    They are still hoping to sell it to Europe but that's starting to look very unlikely. A trade sale or placing of their holding is probably at least 18 mts away.


  • #8
    Pat10
    Registered Users, Registered Users 2 Posts: 251 ✭✭Pat10


    gordongekko wrote: »
    They are still hoping to sell it to Europe but that's starting to look very unlikely. A trade sale or placing of their holding is probably at least 18 mts away.

    During my research into the stockmarkets as a novice I have read a lot about aib's overvalued market cap. But what about its enterprise value? This stands at over 83 billion. This sounds very bad.


  • #9
    gordongekko
    Registered Users, Registered Users 2 Posts: 5,301 ✭✭✭gordongekko


    Pat10 wrote: »
    During my research into the stockmarkets as a novice I have read a lot about aib's overvalued market cap. But what about its enterprise value? This stands at over 83 billion. This sounds very bad.

    where did you get that figure?


  • #10
    Pat10
    Registered Users, Registered Users 2 Posts: 251 ✭✭Pat10


    gordongekko wrote: »
    where did you get that figure?


    http://ycharts.com/companies/AIBYY/enterprise_value


  • #11
    gordongekko
    Registered Users, Registered Users 2 Posts: 5,301 ✭✭✭gordongekko


    Pat10 wrote: »
    http://ycharts.com/companies/AIBYY/enterprise_value

    read the seeking alpha article dated 25 Oct on that link


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  • #12
    Pat10
    Registered Users, Registered Users 2 Posts: 251 ✭✭Pat10


    gordongekko wrote: »
    read the seeking alpha article dated 25 Oct on that link

    I am new to the stockmarket but from stockbrokers to articles like this it all says not to buy aib shares. So what is happening here? My own reasoning, for what its worth, is that it has to do with online trading. When you do online trading you make your own decisions and are therefore w/out the advice of a stockbroker. I think this because I have opened a new online account and your homework has to be done first.


  • #13
    tommylimerick
    Registered Users, Registered Users 2 Posts: 213 ✭✭tommylimerick


    this was a brilliant wealth transfer now the government has a operational control in the banks
    even though b.o.i. is still worth 6 billon I think but the government took all the shares
    wrote off the value of the shares through dilution
    imagine what we could do
    borrow another 84 billoon put eddie hobbs in control of the loot
    the germans wouldn't even mind that much


  • #14
    FuzzyDunlop100
    Registered Users, Registered Users 2 Posts: 144 ✭✭FuzzyDunlop100


    Pat10 wrote: »
    Do they call this a reverse split whereby the number of shares is reduced but the price rises proportional.? At the current number of shares they say the value per share is less than 1cent for a realistic market value. Will the governement do a float just like the british governement did with royal mail?

    Yes, that's called a "reverse stock split" or a consolidation.


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