Allied Irish Banks Significantly Overvalued Versus Bank Of Ireland
By Studioso Research:In two articles last year, we reviewed the capital raising initiatives completed by Allied Irish Banks (AIB). On 27 July 2011, the bank issued 500 billion (yes, billion is not a misprint!) shares at 0.01 EUR each. In our article we gave a price target of 0.033 EUR per Ireland-listed share, and $0.49 per ADR. The ADRs declined to that level on 9 September 2011. In line with the strong performance of the stock market since late November, AIB shares have since risen to 0.10 EUR per Ireland-listed share, and $1.40 per ADR on 8 February. The sale of 500 billion shares at 0.01 EUR represents over 97% of the bank's shares outstanding.
At its current share price of 0.10 EUR in Ireland and over $1.30 in New York, the company has a market capitalisation of 513.4 billion * 0.10 EUR = 51.34 billion EUR. This doesn't make much senseComplete Story »