Quick Question

So, HBOS shares have tanked again after revelations of more short selling.

The rights issue is thus underwater.

Looking here, I see that the dividend yield is nearly 12%. That\’s a trailing indicator of course: but it seems remarkably high to me.

What do the finance types who read here think? That that payout will get cut? Or that this might be fill your boots time?

5 thoughts on “Quick Question”

  1. “What do the finance types who read here think? That that payout will get cut? Or that this might be fill your boots time?”

    The market thinks the former. Obviously the market can from time to time become deranged, but it would be a brave person to call “deranged” at the moment.

  2. I am not sure; to figure out how dodgy HBOS is, a key metric is working out how much exposure the lender has – via its Halifax wing – to the housing market. From what I understand its exposure is pretty high. Getting that down is key to sorting out its share price.

    The whole short-selling thing is a joke. As soon as hedge funds start to disclose their shorts, this means that the rumour-mill will crank up as some investors try to squeeze hedge funds out by putting potentially false, “bullish” rumours around.

    The FSA acted in haste here and will regret it. But then that organisation is full of second-handers who could not hack it in a real bank.

  3. Lloyds TSB is yielding similar at the moment and seems to be well enought to go sniffing around Dresdner. A better bet than HBOS I’d have thought.

  4. As well as the resolution to approve the rights issue, we lucky shareholders (why didn’t I get out at £11.75?) are also asked to approve a motion to allow HBOS to issue shares instead of paying the latest dividend. That doesn’t sound good. But there must be value in the rights issue long-term, unless HBOS goes bust, which seems unlikely.

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