Summary
Very tricky investing when it comes to buying stock which can be revalued by the adjustment of the underlying security asset. Buying stock in a bank holding company is similar to buying options. Various issues develop from the government nationalization of previously held assets by the private sector. Obviously the first issue is the principal stripping (inevitable price valuation destruction), and the second issue is becoming; which controls are available to the existing private sector holders (those in at the beginning) and those new government (government of the people by the people) holders.
Analysis
Seems to me that BEFORE any action to nationalize (my definition includes control over 51%) takes place, all other possible solutions are examined ALONG WITH a majority vote stipulating the stock has become worthless and all existing holders give up, and vote for government intervention via equity.
The next step, becomes equally important - how we go forward. RBS now trades $25 BILLION of capital on US exchanges for adjusted existing holders and to attract new investors.
The issue becomes; The LARGEST shareholder is government (government of the people by the people) holders, and the question which needs to be solved is how to provide ALL SHAREHOLDERS transparent and equal voting for the direction of the company.
Perhaps the only way for new rules to emerge is via litigation.
