This week was very exciting for the shareholders of Fortis. Tuesday October 14th, they knew what the shares were worth on the market, after a suspension period of six days. The answer was a serious shock. In Brussels, Fortis started again at €1.91. At the stock market of Amsterdam €2.00. This is the lowest level that the bank has ever reached since they exist. Which is a big contrast with the price last year, when your share was worth €34.
In the past couple of weeks, there have been a lot of striking changes. First of all, the company was partially nationalised by the Belgian government. Secondly, Fortis was partially sold to the French bank BNP Paribas. Last week, the bank got suspended because they hadn’t given enough financial details about their new structure.
Because of the nationalisation and the sale to BNP Paribas, the stockholders now own a much smaller group.
The market capitalisation before the suspension was about €7.4bn. This Tuesday, it was less the €5bn.
At the beginning of the week, the news was spread that Fortis would receive almost €14.5bn. This came from the nationalisation and the sale of a part of the company.
The board said that all debt will be paid off, but they still had to make “the detailed lines”. The chief executive of Fortis, Filip Dierckx, told that “all options are open for the group’s strategy”. He also wanted to give more information about the management positions before the stockholders meeting in a few weeks.
The suspension was maybe a ‘good’ thing for the company so that they know that they will have to work hard to fix the problems. It is a sign from the government to Fortis in order not to make the same mistake again by keeping information to themselves. Of course, for the shareholders, this is very negative news. They’ve lost a lot of money and now they lose even more.
The shares are incredibly low, but the bank still exists. Without the interventions and other measures, Fortis would be bankrupt.
Now it is up to the company to do everything they can to restore the trust of the shareholders. If they manage to do that, the shares will probably rise again.
I really hope that the board comes up with solid solutions and information before the meeting.
Source: The Financial Times – Fortis reveals value of remnants
http://www.ft.com/cms/s/0/ad4cff3c-99ce-11dd-960e-000077b07658.html
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It's very hard for the investors of Fortis, they did not so well on the markets. But I hope like you Tim that the new board will learn of their mistakes. They have to communicate much better but here in Belgium we really need a repport of the CBFA. They control everything on the markets and made some mistakes with Fortis, I hope they will also learn of their mistakes.
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