Jim Armitage: There's no froth on Royal Mail shares – taxpayers have been short-changed

Outlook Another day, another £380m added to the stock market value of the Royal Mail. Or, to put it another way, yesterday's rise in the shares to 537p means Royal Mail was sold for £2bn less than its true worth. A mass transfer of value from taxpayers (dumped with its pension deficit) to a lucky few.

Biggest of those new owners is, as we now know, The Children's Investment Fund (TCI), which paid up to 480p for its 5.8 per cent.

At last night's close, it was sitting on a profit of considerably more than £33m from its stake-building exercise. Not bad for a few days' work.

Quite what TCI has in mind for the company is not clear, but it will clearly be agitating for a more aggressive shake-up of the business.

That will probably mean a push for sales of properties and peripheral businesses like General Logistics Systems of Europe, which is potentially worth more than £1.2bn.

Sources inside the Royal Mail float camp have been keen in recent days to push out the line that, as more hedge funds pile in, we will see further downward pressure on the share price, as the hedgies look to make "short" bets – gambles on the share price falling.

The "froth", as the Business Secretary, Vince Cable, describes the current price, will blow away like a cappuccino's in a gale.

But such high winds are, in fact, nowhere to be seen.

Data used by traders from SunGard and Markit, which monitor short-selling markers, show there is hardly anybody betting on a fall in the price, and there hasn't been since day one. To be precise, fewer than 0.4 per cent of Royal Mail shares are out on loan.

That's extremely unusual in a situation where a share price has risen so rapidly and indicates one thing, and one thing only. There is no froth.

The market thought the shares were far too cheap at the float, and believes they still are.

Despite days of loud warnings from experienced City voices, taxpayers have been horribly short-changed.

It could well transpire to be the biggest scandal of this administration.

Life and Style
food + drink
Life and Style
Shoppers in Covent Garden, London, celebrate after they were the first to buy the iPhone 6, released yesterday
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
Arts and Entertainment
Ben Affleck stars as prime suspect Nick Dunne in the film adaptation of Gone Girl
filmBen Affleck and Rosamund Pike excel in David Fincher's film, says Geoffrey Macnab
Life and Style
ebooksAn unforgettable anthology of contemporary reportage
Warner Bros released a mock-up of what the new Central Perk will look like
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

COO / Chief Operating Officer

£80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments