Comments on: What happens to bank shares if the banks are nationalized? http://www.secretfinance.com/blog/what-happens-to-bank-shares-if-the-banks-are-nationalized/ Thu, 17 May 2012 21:37:26 +0000 http://wordpress.org/?v=2.7 hourly 1 By: Felix_FINA4242 http://www.secretfinance.com/blog/what-happens-to-bank-shares-if-the-banks-are-nationalized/comment-page-1/#comment-2617 Felix_FINA4242 Mon, 22 Mar 2010 01:37:44 +0000 http://www.secretfinance.com/blog/what-happens-to-bank-shares-if-the-banks-are-nationalized/#comment-2617 If the government completely nationalizes a bank, the existing shareholders will lose their entire investment. However, you should expect that the government only nationalizes British banks in part. In this case, existing shareholders' equity positions will be diluted, but there shares will still have some value. Whether the share price will increase or decrease depends on how successful the government's capital infusion will be. If the current share price reflects default risk and the equity infusion makes default less likely, it it quite possible that the share price will increase.<a href="http://www.autostires.com/brembo-rotors-and-brake-kits-315"> Felix_FINA4242</a> If the government completely nationalizes a bank, the existing shareholders will lose their entire investment. However, you should expect that the government only nationalizes British banks in part. In this case, existing shareholders’ equity positions will be diluted, but there shares will still have some value.

Whether the share price will increase or decrease depends on how successful the government’s capital infusion will be. If the current share price reflects default risk and the equity infusion makes default less likely, it it quite possible that the share price will increase. Felix_FINA4242

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