Q Am I too late to buy shares in Royal Mail?
A You can sign up for shares until midnight tonight – so you’re not too late just yet. Otherwise you will have to wait until they are trading, and risk paying a higher price.
Q Where do I do that?
A The government has its own website, which can be found at royalmailshares.service.gov.uk. But you can also go through one of 65 brokerages.
Q What are the ups and downs of each way?
A Different brokers charge different fees for their service. If you intend to buy and sell regularly, a subscription might suit you best, while if it is a one-off, paying the broker a fee to trade could work better. You can shop around, as some brokers charge a flat fee per trade while others charge a percentage. If you buy from the government site you will not pay a broker’s fee, but you will when you sell – its fees are one per cent, with a minimum of £25 over the phone or £17.50 online.
Q Is there any other difference between the sites?
A The government option allows you to invest a maximum of £10,000, so if you’ve got big savings you want to put in the shares you have to go through a broker. The minimum order is £750.
Q Will I definitely get everything I ask for?
A No – the sale is already over-subscribed, and more investors are still signing up. The upside of this is analysts believe the shares will rise in price right away, because there is excess demand at this price. The downside is you will get fewer shares than you order.
Q How does that work?
A Retail investors will probably receive a fixed proportion of their attempted purchase level, at a percentage decided once the book closes at midnight. If you do not get the amount you want, the difference will be put back in your account. An alternative would be for each broker to be given a fixed allocation to divide up among bidders as the broker wishes.
Q How much will the shares cost?
A The offer range is 300p to 330p, and the final price depends on demand. Since demand is believed to be high, it is likely to fall at the top of the range, or even a little bit above it.