The Government has come under scrutiny on social media networks after it was revealed that the Royal Mail sell off could be under-priced by as much as 80 per cent.
David Cameron is facing criticism today after social media users took to Twitter to protest his handling of £3.3 billion Royal Mail sell-off.
The protest comes after a City stockbroker announced that they estimated the value of the Royal Mail at a sum closer to £6 billion, or 559p per share – much more than the 330p the Government charged when trading opened.
This coupled with the shares soaring 36 per cent in the first few minutes of trading has led to some accusing Mr Cameron of selling the Royal Mail ‘on the cheap’:
Billy Hayes, the general secretary of the Communications Workers Union said: “Now everyone knows that the Royal Mail has been undervalued and sold on the cheap. The low share price is another government error compounding the mistake to sell in the first place”.
Reports have shown that some of the world’s largest sovereign wealth funds are set to be allocated share in the sell-off. State-backed investment groups from Singapore and Kuwait were among those who chose to apply for shares in the postal service.
The influx of foreign owners is likely to cause concern after so many British retail investors have missed out on shares. However, as many as 15,000 Royal Mail employees – almost a tenth of the overall workforce – have bought shares above the ones given free to all employees. This means that a great number of Royal Mail workers will benefit from an immediate rise in the share price, a fact that many Conservative commentators have been keen to highlight.
Vince Cable, the Business Secretary, was keen to play down the importance of the rising price. He said:
“You get an enormous amount of froth and speculation in the aftermath of a big IPO of this kind. It is of absolutely no importance whatsoever. What matters is where the price eventually settles and if we look back at this in three months’, six months’ time, or indeed years to come, that’s what we’re really interested in”.
The Financial Times produced this video looking at the Royal Mail’s share price: