Dont buy AIB shares??

rochestown

Can anyone please explain to me why Noonan (as the majority shareholder in the bank) would come out yesterday and warn small investors not to by AIB shares?

There must be some benefit to the government to do this - they wouldn't be making a statement like this to help the small fish... would they??

Any thoughts welcomed...

robp

rochestown wrote: »

Can anyone please explain to me why Noonan (as the majority shareholder in the bank) would come out yesterday and warn small investors not to by AIB shares?

There must be some benefit to the government to do this - they wouldn't be making a statement like this to help the small fish... would they??

Any thoughts welcomed...

I think in this case they are trying to protect the small investors. They are considered to be 4x overvalued.

gordongekko

There shares are worth about 2 cent and will be subject to a lot of consolidation over the next year which may result in a loss for anyone purchasing now.

rochestown

robp wrote: »

I think in this case they are trying to protect the small investors. They are considered to be 4x overvalued.

It still doesn't make sense to do this to me - by coming out and saying this they have devalued the share price by 30% in 24 hours?

Why would they only offer advise on AIB i would think PTSB are in the same boat - why not offer advise instead to buy BOI... it feels very suspicious to me...

smcgiff

When large portions of the shares are sold to institutional investors the real value of the shares will be evident, and anyone left holding these penny shares will see possibly upwards of 50% of their values wiped out.

Very few people are buying the shares based on the inherent value of the company, but because they are cheap shares that were ONCE worth many multiples (before share dilution and boom time profits) of current price.

rochestown

smcgiff wrote: »

When large portions of the shares are sold to institutional investors the real value of the shares will be evident, and anyone left holding these penny shares will see possibly upwards of 50% of their values wiped out.

Very few people are buying the shares based on the inherent value of the company, but because they are cheap shares that were ONCE worth many multiples (before share dilution and boom time profits) of current price.

I get all that but why only single out only AIB there are other institutions in the same position?

smcgiff

rochestown wrote: »

I get all that but why only single out only AIB there are other institutions in the same position?

AIB is the bank targeted for sale by the government. They are forewarning.

Basically, they are pre-empting the backlash from the penny shareholders when they do incur losses.

gordongekko

rochestown wrote: »

It still doesn't make sense to do this to me - by coming out and saying this they have devalued the share price by 30% in 24 hours?

Why would they only offer advise on AIB i would think PTSB are in the same boat - why not offer advise instead to buy BOI... it feels very suspicious to me...

Aib shares are valued buy the nprf as being worth1.7 cent. He can't comment about ptsb as they are currently raising funds in the market

Geuze

rochestown wrote: »

Can anyone please explain to me why Noonan (as the majority shareholder in the bank) would come out yesterday and warn small investors not to by AIB shares?

There must be some benefit to the government to do this - they wouldn't be making a statement like this to help the small fish... would they??

Any thoughts welcomed...

This has been known for several months. It was mentioned in the Investment forum months ago.

The AIB share price is unrealistic.

The State own 99.8%, and the remaining 0.2% free floats.

Speculators / day traders, etc. have driven the few shares that trade up so much, that notionally AIB is worth 50bn+.

Clearly, it's not.

So clearly the price is a false price.

Everybody knows this, or at least they should.

Noonan simply stated it publicly yesterday.

Geuze

http://www.boards.ie/vbulletin/showthread.php?p=88409890

Discussed in Jan 2014.

rochestown

Geuze wrote: »

This has been known for several months. It was mentioned in the Investment forum months ago.

The AIB share price is unrealistic.

The State own 99.8%, and the remaining 0.2% free floats.

Speculators / day traders, etc. have driven the few shares that trade up so much, that notionally AIB is worth 50bn+.

Clearly, it's not.

So clearly the price is a false price.

Everybody knows this, or at least they should.

Noonan simply stated it publicly yesterday.

This is all understood and clear - i simply was questioning the reason that Noonan would get involved commenting negatively on a single institution yesterday... i think 'SMCGIFF' has hit it on the head above... thanks for the comments...

RobertKK

AIB with it's share price is valued at €58 billion.
Deutsche Bank is valued at €55 billion.

I think that says it all really.

RobertKK

rochestown wrote: »

This is all understood and clear - i simply was questioning the reason that Noonan would get involved commenting negatively on a single institution yesterday... i think 'SMCGIFF' has hit it on the head above... thanks for the comments...

As smcgiff put it, they probably don't want people wasting their money and then blaming the government for not telling them how bad an investment it is.

Bizness

smcgiff wrote: »

AIB is the bank targeted for sale by the government. They are forewarning.

Basically, they are pre-empting the backlash from the penny shareholders when they do incur losses.

RobertKK wrote: »

As smcgiff put it, they probably don't want people wasting their money and then blaming the government for not telling them how bad an investment it is.

Penny shareholders are just cannon fodder to the largest shareholder, i.e. the Government.

If you were of a more cynical bent, you'd be thinking that instead of being genuinely worried about the health and well-being of the cannon fodder, warning the prospective penny shareholders means that prospective penny shareholders do not incur capital losses on investing in AIB and are now not able to carry this loss forward against future capital gains. And the ruling boyos do not get their filthy paws on the 33% capital gains tax, and thus will find it harder to keep themselves in the lifestyle that they have become accustomed to.......

hmmm

I'd say that when Noonan comes to sell off AIB for a fraction of the (false) value it's currently at, he doesn't want to deal with the screams of outrage that he is selling it for "less than it's worth".

Gandalph

Would I be crazy in saying that he is making these claims to lower the price of the shares to make it easier for the government to actually sell them off? As most investors (especially those in the private sector I would like to think) knows they are poison at the moment.

RobertKK

Gandalph wrote: »

Would I be crazy in saying that he is making these claims to lower the price of the shares to make it easier for the government to actually sell them off? As most investors (especially those in the private sector I would like to think) knows they are poison at the moment.

The shares are worth 2.5 cents per share at the very most. Anyone who has them should be selling hard at the moment.
So yeah to sell the stake that the government holds, it needs the shares at a realistic price.

smcgiff

RobertKK wrote: »

So yeah to sell the stake that the government holds, it needs the shares at a realistic price.

Not really. The shares will be offered at an agreed price.

It's not as if an institutional investor is going to be put off making an offer just because the current trading price is over inflated.

I do agree that the writing's on the wall for the share price though. You can be pretty sure it's the amateurs that will have been caught.

ixus

RobertKK wrote: »

AIB with it's share price is valued at €58 billion.
Deutsche Bank is valued at €55 billion.

I think that says it all really.

You should check out DB's derivatives exposure.

gordongekko

ixus wrote: »

You should check out DB's derivatives exposure.

I'm out

ixus

gordongekko wrote: »

I'm out

Probably best.


Deutsche Bank's Latest Capital Raising Won't End Its Problems

......In 2007, when the first signs of the impending financial crisis began to appear, it was the most highly leveraged bank in Europe, with assets 68 times its Tier 1 capital. It narrowly managed to avoid sovereign bailout in the financial crisis, but it was a principal beneficiary of the US government’s bailout of AIG and it received liquidity support from the Fed and the ECB. But its problems weren’t limited to US subprime and toxic derivatives.......

Last accounts:


NY Fed Slams Deutsche Bank (And Its €55 Trillion In Derivatives): Accuses It Of "Significant Operational Risk

gordongekko

ixus wrote: »

Probably best.


Deutsche Bank's Latest Capital Raising Won't End Its Problems



Last accounts:


NY Fed Slams Deutsche Bank (And Its €55 Trillion In Derivatives): Accuses It Of "Significant Operational Risk

The point being made about Deutsche bank is that you have the choice to buy a regional bank on the fringes of Europe which is greatly overvalued or buy a diversified global bank valued at the same price.

frankeee

What amazes me is that they're still at 8c despite Noonan's warning. I asked a buddy had he sold up & he said Nah, I'm going to ride it out Sort of reminds me of Dougal on the milk float heading for the cardboard boxes. The crash is coming, just really slowly!

arrowloopboy

This looks pretty simple so , valued at around 8c , actually worth about 2.5c , I'll be shorting them Monday morning , IG has them listed at 8.07 / 8.15 for a June contract , just have to figure out a s/l , maybe 10.5 / 11.00 , can anyone give me a valid reason against this trade ?

Amirani

AIB currently have the 12th largest market cap of any bank in the world. How could anyone not think they were overvalued?

Value Hunter

Arrow,

Not sure if you'll be able to get access to short selling due to the float being so small?

arrowloopboy

Value Hunter wrote: »

Arrow,

Not sure if you'll be able to get access to short selling due to the float being so small?

There on Ig ready to be bought or sold , the float isn't relevant I think since I'm only betting on the s/p and not actually buying or In my case selling anything , I'll let you know in the morning , I need to find out what happens to my position if they are suspended from trading .

arrowloopboy

arrowloopboy wrote: »

There on Ig ready to be bought or sold , the float isn't relevant I think since I'm only betting on the s/p and not actually buying or In my case selling anything , I'll let you know in the morning , I need to find out what happens to my position if they are suspended from trading .[/quote.

Well , these are not borrable to be sold , that taps that on the head

Sonnenblumen

Anyone still holding AIB shares after Minister Noonan's recent and unequivocal warning on SP is either sleep walking or deluded.

arrowloopboy

Sonnenblumen wrote: »

Anyone still holding AIB shares after Minister Noonan's recent and unequivocal warning on SP is either sleep walking or deluded.

Yet thousands of people held said shares from 20 odd quid down to pennies with the hope of them going back up , you'd be surprised how many deluded sleepwalkers their are knocking about that just except taking a hit !

David900

arrowloopboy wrote: »

arrowloopboy wrote: »

There on Ig ready to be bought or sold , the float isn't relevant I think since I'm only betting on the s/p and not actually buying or In my case selling anything , I'll let you know in the morning , I need to find out what happens to my position if they are suspended from trading .[/quote.

Well , these are not borrable to be sold , that taps that on the head

There is still a short selling ban in place on these shares AFAIK.