Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hard to Believe – but RBS Shares Are Still Only Worth 4% of What They Once Were.

By Malcolm Stacey

22 May 2015 00:38

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Hello Share Shapers. While composing an essay about RBS (RBS), I found myself writing that their shares are now only worth 4% of what they used to fetch before the great credit crunch of 2008.

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Comments

Damosin

22 May 2015, 01:06

After all of the dilutions etc, I think is in highly misleading to simply compare share prices now vs pre-crunch.

Market cap now: £41bn. Adjusting up from 4% to 100%= £1025bn = $1,600bn. Apple Mkt cap is $750bn. Still sounding like reasonable comparison?

I believe the market cap of RBS in 2006 was around £65bn to give a bit more context

Anchoring – tendency to attach or “anchor” our thoughts to a reference point – even though it may have no logical relevance to the decision at hand.
Jeremy

22 May 2015, 03:11

Malcolm is correct as far as investors who held prior to the credit crunch are concerned.Before the crunch they were trading around £7 +; today the equivalent price is 35.4p as the shares were consolidated 10 for 1 post crunch.
The present capital value of RBS equity may be of the same order as pre crunch but this is due to additional shares being issued mainly to HM Government.
Malcolm Stacey

22 May 2015, 07:14

Thanks for your post Dammers, but I don’t think it is relevant. Jeremy is right when he agrees with me. You cannot argue with simple maths. The shares are worth 35.5 pence today if you factor out the ten for one swap in 2012. The shares were more than £9 at the crunch. If you had held your RBS shares since the crunch, a £1,000’s worth of shares would now be worth 35 quid. A disgusting performance, given the obscene salaries bankers were still getting after the crunch.