Royal Mail shares soar to 456p

Photograph by Monica Arellano-Ongpin

Royal Mail shares rose by more than a third to 456p at the start of open trading on the London Stock Exchange, fuelling fears that the company was sold too cheaply.

The floatation was hugely oversubscribed with the company valued at £3.3 billion with shares priced at 330p, with the price rising rapidly as institutions began conditional dealings earlier today before the shares list officially next Tuesday.

The share price peaked at 456p with 10 million shares traded in the first 30 seconds as the market opened, before slowly settling back down at 446p at the time of publication.

As the market has valued Royal Mail at more than 38% higher than the £330 billion set by the government, questions are being asked as to whether the British public have been short-changed by the privatisation. Business Secretary Vince Cable has defended the move, but the general secretary of the Communication Workers Union, Billy Hayes saying:

“The massive jump in the share price confirms that the government and its expensive city advisers got the pricing structure wrong and have undervalued this treasured national institution. The taxpayer has lost out immediately and we all now face an uncertain future for our postal services which will be run for profit instead of public service. Privatisation is about greed”