ANYONE KNOW WHY THE ROYAL BANK OF SCOTLAND IS SHOWING A SHARE PRICE AROUND THE 6.59 MARK WHEN IT WAS 18.00 OR SO THE OTHER WEEK OR AM I GOING STRANGE?????????????

Some press reports suggest a write-down of 10b and a rights issue of 15b and the sale of Direct Line and Churchill for 4b and the cancellation or reduction of the dividend..

When did it all go wrong..?

But can we believe anything that is said, as RBS stated after the last write down that there would be no more hidden exposure to the sub prime market surfacing. At the time many of us stated that we were skeptical that the whole truth was out.
I personally don't think they have anything further hidden, as to come to the market again after this proposed issue would destroy any belief/confidence left.

I remember in February that most people here were indeed skeptical to the true extent of writedown then, and expected more to come. RBS must use this week to clear the decks with writedowns, and have large enough rights issue, to ensure they don't have to come back to the shareholders. I wonder if as recently as February, RBS like most banks may not have had a clear picture of the amounts of risk they were holding, ABN Ambro had higher exposure to sub prime debts, than most European Banks.

Watch now as other banks scramble to follow RBS, re writedowns and rights issues.

Someone on another site posted that the heads of managements at banks/building societies should have been more aware and should take cuts in salaries/bonuses.
The post was rubbished soon after. It was rubbished with the reasons given that most banks hardly realized there was sub prime in the deals they were buying, due to the way they were packaged and sold off to unsuspecting banks.
Whatever happened to Due Diligence. If you were intending to buy a company and went to these banks for a loan they would question what steps you had taken to investigate the companies profits/loss, debt, cash flow, potential etc, almost the third degree as I know to my own experience.
Whilst appreciating that the buying of a business to purchasing packaged loans is not an exact parallel, the banks that took on these financial loan packages (on reading many sub prime articles) carried out about as many checks as most punters carry out buying knocked off CD's at a car boot sale.
Some institutions that bought these packages now admit their checks were somewhat lax, whilst many experts (yes I know hindsight is a great thing) have stated that many bought with almost no checks, IE bought almost as seen.
The truth is probably somewhere in between.
They took on these packaged loans, because they were obviously priced at such an on the surface bargain that greed and not prudence was the order of the day. Many then re-sold on, probably still not full aware of their true value.
So yes I fully agree with the statement that the salaries and bonuses should be cut, but don't limit this to RBS. All such Dell Boy dealings should have been seen for what they were. We are talking about top so called financial experts here, who like those markets of old, 'OK son you have just bought a bargain, now don't open the box till you get home'.

Telegraph says a RI at 1for 2 @250p.

Surely that will crush their sp?

not necessarily ..... though it will of course be dilutory, the market may well perceive (and that is the important factor) that the end of the world is not imminent and that this presents a good opportunity to pick up cheap stock

IMO I don't think people have a clue what they are going to say.

There is an awful lot of speculation in the papers but very little fact.

A rights issue, probably, as for the divi, who knows.

Whatever the rights issue price might be, it's worth bearing in mind that historically it's not uncommon for the sp to drift lower than the right issue price afterwards. I'm not saying that this will happen with RBS, but if the BOE injection of cash today takes time to take effect, which of course it will, then fear could easily return to the sector.

It all depends on the markets appetite for the billions of shares about to be issued in a sector which is completely out of favour. For once the underwriters might earn their fat fees!

200p incredible..

Didn't expect that, and sp only down 10p at moment.

Even with the dilution the offer price is at a bit more discount than I was expecting, especially with the extra cash not going toward a bale out as such. As I understand it is going into the cash pile. My skeptical thought is with the offer price discount as it is are there further write downs to come. I very much doubt it, but as said in Post 82, they have stated before that there would be no further write downs, and look what has just been declared.
Not jumping up and down yet with the excitement of the offer. Banks don't give things away now do they, so not decided yet whether to take my allocation.

Not sure whether to take out an overdraft for 60k to allow me to take up my rights !

Funny (but ironical not the Ha Ha type) how our esteemed Government has stated that Banks/Building Societies should be more prudent in the fact of keeping more cash in reserve from the good times, like the last few years, in case of bad times as those these financial services are going through now.
Shame the Government can't practice what they preach.
Hypocrisy has been taken to an even higher level.

I believe after the rights issue a fair valuation would work out at 270p range, please correct me if wrong.

RBS should be given credit for full disclosure; setting a benchmark for other banks.

Spitfire: at sp of 360p, price after dilution should be 18/29th*160+200, i.e. about 300p. The key question is what level the dividend will be set at. Any thoughts?

Eric

Whilst agreeing that they have probably now made full disclosure, just remember they said that last time.
Don't wish to keep repeating this but whilst some posts still appear to state beliefs re full honesty by RBS, it obviously still requires repeating.

I think Collins Stewart and another broker have said ex rights is 307p.

When you say divi, do you mean the next interims or do you still think they will change the full year in the next few days?

when is the last day you have to hold RBS to take advantage of rights issue.[has it gone?]