AIB to offer small shareholders the opportunity to sell directly without costs

Brendan Burgess

Brendan Burgess

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www.irishtimes.com

AIB plans to mop up ‘worthless’ small stakes once valued at up to €120,000

A repurchase would crystallise large capital losses for pre-crash AIB investors, even if they could be used to offset tax on investment gains elsewhere
www.irishtimes.com www.irishtimes.com

[AIB will ] launch a so-called odd-lot offer to acquire as many as 20 shares from individual investors, according to meeting documents posted this week. Sellers would be offered 5 per cent more than the prevailing share price as an incentive.

An offer for 20 shares would equate to cheque of a little over €100, based on AIB’s current stock price. However, if such investors were to sell their shares through a stockbroker the proceeds would almost entirely be absorbed by related fees, the bank noted.


Almost 69,000 of AIB’s 75,000 investors are in this small holdings category – but, combined, represent only 0.01 per cent of all its stock.
 
A holding of 20 shares equates to what were 5,000 units of AIB before it moved in 2015 to swap every 250 shares in issue at the time for one new share. At their peak in early 2007, 5,000 shares – the equivalent of 20 today – would have had a market value of €119,750, or €29.95 each.

Even now, nearly 15 years after the share price tanked, it must be very painful to have that horrific loss fully and finally crystallised.
 
Yes you can harvest those losses, unfortunately many people after getting burnt with bank shares never touched another share again. They probably have their money locked away in state savings or deposit accounts earning nothing or actually losing money slowly
 
I know a few people who hold bank shares from before the crash and have heard them say that eventually the shares will recover.
I just want to point out that, unfortunately those old shares will never break even, because actually the market cap pretty much has recovered.

In the early 2000's when the boom was getting boomier, AIB's market cap was $12-$14 billion.
Just before the crash in 2008 they were at $19 billion.
In 2011, the depths of the recession, the market cap was $0.16 billion (a 99% drop)
Now AIB's current market cap is $14 billion.

The valuation of the bank has recovered. But the share price will never come back, because the ownership had to be severely diluted during the bailout. Meaning that each old (pre stock reverse split) share owns a smaller % of the company than it used to.

So for those of you who are hanging on until they get their money back, I'm afraid to say that it is close to impossible.
The shares could go up (or down) another 10, 20, 30% but they will not 10x

companiesmarketcap.com

AIB Group (Allied Irish Banks) (A5G.IR) - Market capitalization

As of April 2024 AIB Group (Allied Irish Banks) has a market cap of $14.29 Billion. This makes AIB Group (Allied Irish Banks) the world's 1245th most valuable company according to our data.
companiesmarketcap.com companiesmarketcap.com
 
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Brendan Burgess said:
Same with eircom.
Click to expand...
I watched my parents' investments in Eircom go south back in the day and 25 years later I have BT and Vodacom investments that are underwater to the tune of 50%+. Just an anecdote.

On the AIB issue, I have 6 (current) shares acquired pre-2008 and I liked the idea of AIB having to issue 50c dividend cheques each time there was a dividend payment. Maybe I'll be €30 better off after this but I won't *feel* better.
 
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