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Did Howai undervalue First Citizens shares?
In October 2013, a company owned by the British State named Royal Mail was listed on the stock exchange in London. The David Cameron administration went ahead with the privatisation of Royal Mail despite strong opposition from the Labour Party and the trade union that represented the 150,000 workers at the company.
Royal Mail had an initial share capital of one billion shares. Of that amount, 521.7 million existing shares, representing 52.2 per cent of Royal Mail’s share capital, were sold to institutional and individual investors, most of whom were domiciled in the UK. Another 100 million shares, equal to ten per cent of the company’s share capital, were allocated to the workers for free. The UK government retained a 37.8 per cent holding in Royal Mail.
The Cameron administration has been savaged because Royal Mail, which was initially sold at £3.30 a share, jumped by 38 per cent to £4.45 on its first day of trading.
Back then, the political leader of the Labour Party, Ed Miliband, accused the Conservative government of engaging in a “fire sale of a great British institution,” while Chuka Umunna, the shadow business secretary, said the steep rise on the first day of trading indicated the government had “massively shortchanged” taxpayers by significantly undervaluing the company.