The pressure on business secretary Vince Cable to admit that the government made a mistake pricing Royal Mail shares at 330p has been steadily building since the company floated a year ago.
On the first day of conditional trading, shares soared 38 per cent, having already opened at 403p. This increase, coupled with fevered appetite for the shares in the weeks following, led to questions over whether the stock had been woefully undervalued and raised concerns about priority investors making a quick buck by dumping their shares early on. A number of select committee hearings followed. Around 60 per cent of the company was sold off at 330p, raising £2bn for the Treasury in the process. Yet in January, the price hit 616p.
Since the start of this year, however, the share price has broadly been in decline. In late September, it dipped below 400p for the first time since the float, a key moment for Cable, whose continued assurances that the stock was well priced had fallen on deaf ears.
One year on and the City is beginning to mumble about how Cable was right to hold firm to his argument that 330p was a fair price for the shares. Vince vindicated at last?