I mean my Bradford & Bingley shares.
I got 250 shares in the new B&B plc when the building society of the same name demutualised. At the time they were trading for 330 pence each and reached a peak of 435.5 pence. In a demonstration of the follies of Thatcherite capitalism, they began borrowing and lending with the big boys and girls. Then came the credit crunch and they found themselves undercapitalised.
I am now getting a succession of voting forms to vote on one rescue package after another. The ever-changing rescue packages indicate a board flailing around in a desperate bid to save their enormous salaries protect the investors. Frankly, IMHO, it is all futile – the share price is continuing to tank. Today it is 34 pence. When the B&B goes bust and the share price hits 0.0 pence, should I frame my share certificate as a symbol of the follies of finance capitalism, or should I use it as bog paper?
Tags: credit crunch, demutualised building societies, finance, Thatcherism
Letting Off Steam 
July 10, 2008 at 3:56 pm |
But you did pay for them. Presumably you had some accounts with them that were less value for money after demutualisation. The promise being that the increasing value of your shares would compensate you for this.
July 10, 2008 at 7:59 pm |
Fair point. I had about £600 in a bond so even if the interest was reduced by a full percentage point to fund the shareholder dividends, I still got the shares pretty cheaply.
People who had a mortgage with B&B will have paid a whole lot more in interest over the past few years than they would have done if it remained a mutual but apparantly a majority of them voted for demutualisation too.
July 16, 2008 at 3:20 pm |
You probably don’t even have a share certificate; I expect it is held by Computershare.
It’s probably cost them as much to send out all the recent paperwork as the shares are worth, and if the price stays so low we won’t be able to sell them because the dealing costs will be more than the value.
On a side issue, I use the mutual Nationwide, but notice that they have an extremely overpaid Board, and pay lower interest if you pay in less money per month.
Capitalism sucks. (Who said that?)