Message Font: Serif | Sans-Serif
No. of Recommendations: 3
Keep bottom fishing NBG it is wise.

For AIB, there will be about 10 billions new European shares to get the 5 billions Euros gap filled. If this is a rights issue, then you will have to throw in like 10$ per 1$ of stock you own to just maintain your stake. Market cap could be 5-10 times what it is currently then. The government will likely buy a lot of this McFlurry of new shares. IRE is already recapitalized and much more advanced in the cleanup process and it offers to buy 2.5 Euros of shareholder's equity for 1$ right now. This is a long term investment.

AIB will be an investment again once all of these conditions are fullfilled:
It is fully capitalized
Its market cap is equal or lesser than that of IRE because if not, you prefer IRE.
Nama toxic loan mess is done and there is clarity on upcoming losses in the rest of portfolio
Fire-sale of assets to raise capital are fully done.

As of none, AIB is far from fitting the investment thesis. It is a good short sale target quite a bit suicidal in my opinion because when sheep charges against you for good or bad reasons, you may get violently decapitated. It is also a gambling stock, buying it after a down streak hoping that people will do like you but just after you. I re-read this and it really fits speculation. And I think the risk reward deal is a loser one here.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.