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Spend & Save

Five questions about: Royal Mail share sale


So the Goverment's flogging another of our crown jewels?

What did you expect? Tories have always been open about boosting Government coffers by selling businesses.

But what's in it for me?

You have the chance to snap up shares in the initial public offering in the next few weeks. You'll need to be able to stump up at least £750, or £500 if you work for the company.

Will I be able to make a quick profit?

That's unlikely. However, the sell-off is likely to be priced to go, as the Government can't afford the embarrassment of it failing.

So can't I buy cheap at the IPO and sell them when they soar?

There may be lots of people hoping to do that. That'll make it a buyer's market which will keep the price down.

OK, what about long-term prospects?

Royal Mail's traditional role as a letter deliverer has declined as email has grown, but the explosion in online shopping has boosted its parcel business. So its future success depends on how well it can take on international parcel giants such as DHL. There's also worker uncertainty ahead, with strikes promised. It may be wise to avoid the IPO hype and look at the shares later.