Royal Mail shares soar 38% as Labour complains of knockdown price | UK news | The Guardian - 0 views
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Royal Mail shares soar 38% as Labour complains of knockdown price
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Ed Miliband blames government for underpricing in 'fire-sale of a great British insititution' as investors make £284 paper profit
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The government has been accused of shortchanging taxpayers by selling off Royal Mail at a knockdown price after shares in the privatised postal service rose by 38%
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This article shows how demand for shares in the newly floated UK postal service Royal Mail has pushed the price up from 330p a share to 450p. This is the price in which demand is seen to be equal to supply, something the UK Government are being criticised for failing to notice as they believed 450p was a far to high price. The move itself if highly controversial and has been a hotly debated topic ever since it's proposal with many employees fearing that jobs will be lost.
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I think this is really normal. Simply because private companies tend to have higher efficiency rates and therefore make more profits, this is the business part of the reason. Now if we consider the economical reason, I think that higher profits (deviants) will attract a lot more shareholders, this means higher demand. from the other side, shareholders will be willing to keep their shares as the company is making more and more profits, therefore less shares supply. So in short, more demand, less supply of shares could not lead to anything else except hiher prices and greater value of the company.