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Should I or Shouldn't I invest ?


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Old 18-09-2005, 06:32 PM   #1
Jangar
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Question Should I or Shouldn't I invest ?

Post Danmark (the Danish Postal Services) is going public very soon and have offered employees shares, the minimum amount of shares I can buy is 30 and the max 273 at DKR 92. The proper price for them is around DKR 240. So if I buy minimum it will set me back around DKR 3000 and the max around DKR 25 000. (to convert to £ divide by around 11, depending on the time of day )

Now this is very tempting, but the main drawback is that I'll not be able to sell my shares for at least 5 years. So though the price looks reasonable at the moment 5 years is a lot of time for it to drop... But then again I'll be buying at a good price I have the money on hand with a bit left over (rainy day money) but with Venus moving over here and us perhaps needing the money for something for the new house I am in a quandry as what to do...

It seems silly investing the money out of my rainy day funds and then having to borrow money for home improvements... But then again perhaps the returns on the shares may out weigh the interest on a loan...

Any thoughts please ?
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Old 18-09-2005, 06:39 PM   #2
dudette
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I think it would depend on how soon you'll be needing money for home imporovements. For such a good price I think you would be silly not to take them (if you do have the cash to buy them)
Many banks would give you a good rate of interest if you already have assets to borrow against, so the cost of the loan shouldn't be too much ...

Have you researched how the company is being managed at the moment? ie do you think they will be able to maintain those prices for their shares in the future?
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Old 18-09-2005, 06:48 PM   #3
TheDuck
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Quote:
Originally Posted by Jangar
Any thoughts please ?
Yes ... may I buy them

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Old 18-09-2005, 06:49 PM   #4
mcamp999
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You need to consider whether or not you are a risky investor. Single company share investment is considered one of the most risky investments out, even if it is a utilities company. You may very well lose out on a windfall in 5 years time, but you must consider all of the angles. Certainly, investing money in a share that may or may not make you money in the future, and then taking out a loan which will cost you interest doesn't make sound financial sense to me. If you want more precise advise, I would need a lot more information about the share option, i.e. is the company privatising?

On the other hand, people have made money on share options. Also, have you considered the tax implications?
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Old 18-09-2005, 07:03 PM   #5
Jangar
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Thanx for the replies And the food for thought...

Have you researched how the company is being managed at the moment? ie do you think they will be able to maintain those prices for their shares in the future?

At the moment PDK is government owned but are streamlining like mad, but how we fare over a five year period is difficult to tell....

Yes ... may I buy them

Presuming you mean buying PDK, I'll leave you to work out the maths... 21 000 employees buying a max of 273 shares each will constitute 3% of the overall shares...

You need to consider whether or not you are a risky investor. Single company share investment is considered one of the most risky investments out, even if it is a utilities company. You may very well lose out on a windfall in 5 years time, but you must consider all of the angles. Certainly, investing money in a share that may or may not make you money in the future, and then taking out a loan which will cost you interest doesn't make sound financial sense to me. If you want more precise advise, I would need a lot more information about the share option, i.e. is the company privatising?

Sorry I should've said privatising instead of going public (Just goes to show how much I know about these things...) I agree that it is risky but how much of a risk can the postal service be ? Is it normal for a company to drop over 50% in shares over the first 5 years ? I'll not loan money to buy shares !!! The money I spend will be part of my savings (money used to buy luxuries and for U.K. visits, though I may need to dig into it when getting somewhere else to live...)

Not sure about the tax implications But surely they cannot take more than I gain from them ?
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Old 18-09-2005, 07:15 PM   #6
TheDuck
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Quote:
Originally Posted by Jangar

Yes ... may I buy them

Presuming you mean buying PDK, I'll leave you to work out the maths... 21 000 employees buying a max of 273 shares each will constitute 3% of the overall shares...
Oi ... your shares not the biz

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Old 18-09-2005, 07:18 PM   #7
Jangar
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Quote:
Originally Posted by TheDuck
Oi ... your shares not the biz

So I can pawn them of on you if they drop in value ?

Wish I'd invested in Skype....
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Old 18-09-2005, 07:21 PM   #8
mcamp999
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Quote:
Originally Posted by Jangar
Sorry I should've said privatising instead of going public (Just goes to show how much I know about these things...) I agree that it is risky but how much of a risk can the postal service be ? Is it normal for a company to drop over 50% in shares over the first 5 years ? I'll not loan money to buy shares !!! The money I spend will be part of my savings (money used to buy luxuries and for U.K. visits, though I may need to dig into it when getting somewhere else to live...)

Not sure about the tax implications But surely they cannot take more than I gain from them ?
Jan under those circumstances, I would say you have a good chance of making some money. All I could say is that if it was me personally, I wouldn't hesitate to buy.
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Old 18-09-2005, 07:30 PM   #9
Jangar
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Originally Posted by mcamp999
Jan under those circumstances, I would say you have a good chance of making some money. All I could say is that if it was me personally, I wouldn't hesitate to buy.
Thanx

That is basically what I've been told all around but I am still a bit hesitant, what with having to invest in a bigger house and all that But perhaps redoing a kitchen or bathroom could wait 5 years....

Will wait to see what the boss suggests
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Old 18-09-2005, 07:56 PM   #10
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Wink

Quote:
Originally Posted by Jangar
Will wait to see what the boss suggests
Boss says let TheDuck buy your intial shares



welly welly nice
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