Just before 1pm today the Stock Market noted that there had been a sale, at a price of 41p per share, of 3,328,672 shares in Rangers International Football Club PLC at a price of 41p each.
With such a sizeable sale there will require to be an imminent announcement about the seller/buyer.
What will be interesting is the view on life of the seller.
With such a large shareholding it is unlikely that the seller paid full price for the shares at the IPO. It is much more likely that the seller is one of the initial investors who got shares for 1p each.
But the philosophical matter comes in as follows.
The seller, if they bought the shares for 1p each, and the holding has remained static would have had a stake worth £3,095,664.96 at the high water mark of 93p on December 27th last year.
Eleven months later and the same holding was sold for £1,364,755.52.
So, if the shares cost the seller 1p each they have still made an actual profit of £1,364,755.52 – £33,286.72 = £1,331,468.80. A profit of almost £1 1/3 million for an investment of just over a year is not at all bad, especially against an investment of £33,000.
On the other hand, in a Jim Bowen-esque, “let’s see what you could have won”, style if the sale had taken place at the peak price, then the profit would have been far higher. In fact therefore the sale today gives the seller a profit which is £1,730,909.44 less than they would have made selling just after Christmas.
So, if you were the seller, would you be happy to have made a profit of £1.3 million, or be thinking that an earlier sale would have more than doubled your gains?
Glass half empty, or glass half full …
Posted by Paul McConville