Direct Line Insurance. How to make money at floatation.
The UK’s largest government owned lender RBS has raised £787 million pounds through its initial public offering. This is good news as the sell off has been required by the European Union to comply with current legislation. In 2008 RBS received a £45.5 billion government rescue package, the biggest ever in the whole world but the sale is now required to avoid future compliance issues.
So the big question for us in the real world is, ‘How to make money on it?’ As always its about having an edge. You can read all the reports, the press releases etc but then everybody else can do that too so it doesn’t gain you an edge. Everybody knows its been doom and gloom with Direct Line figures for the last ten years and that in the last 18 months they look like they have turned a corner.
A general wide held expectation is that it could be a repeat of Facebook. Get in at the start for a quick profit and then get out quick because this could fall like a stone!!! The question is how do you confirm this expectation. The only factual way to do this is by studying Price Behaviour, being able to understand Price Indicators, and knowing how to build a Trading Plan. If this stock and its trading plan can be dove tailed into your Portfolio Plan then it could be a very worth while trade!!
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