I was issued with the free 250 Alliance and Leicester shares back in 1997 and have largely forgotten about them, just allowing the dividends to be paid into my bank account each year.
But I got a letter from A&L the other day with an offer to receive shares instead of a cash dividend.
My initial reaction was to opt for the cash dividend as the share price is plummeting weekly and now stands at 489p – does one want to hold more shares than one has at present when the price is dodgy and selling them would be difficult and possibly be at a loss too? The dividends will probably fall this year in any event. Last year’s dividend of £138.25 would have given me 28 shares at their current price.
What do you think? There seem to be rumours of A&L’s business model being unsustainable (yet others disagree), so will that see the share price drop further and render any remaining shares worthless? Time to jump ship and cut my 'losses'?
I don’t need the money and am happy to ride this out over the next, er, 20 years! But I wouldn’t want to lose out on enough money to give me a couple of nice holidays, or the option to invest the money elsewhere.
What would other Singing Pigs advise?