The Lemon Fool

One thing that's puzzled me, is the official name for a share, e.g.

LEGAL & GENERAL GROUP PLC ORD 2 1/2P 
PERSIMMON PLC ORD 10P
NEXT PLC ORD 10P

seems to followed by a value in pence. I used to wonder what the figure meant, but now I think I know (and sorry if I'm seem really dumb, and that this is "really obvious") what it is, i.e. it is just the original price of the share from the IPO?

thanks Matt

(Out of interest I found the above descriptions here:
https://www.londonstockexchange.com/exc ... XSET1.html
https://www.londonstockexchange.com/exc ... XSET1.html
https://www.londonstockexchange.com/exc ... XSET1.html )

Matt, ordinary shares have a nominal value, the difference between that and the share price being the shareholders' premium. You will note that, when a company has a return of capital, the nominal share price is reduced accordingly. Likewise if there is a share split or a subsidiary is hived off.

When a company floats, the shares are given a nominal value, like £1 or 25p. New shares may not be issued for less than the nominal value, which led to some tricky footwork when Segro took over Brixton Estates.

TJH

tjh290633 wrote:Matt, ordinary shares have a nominal value, the difference between that and the share price being the shareholders' premium. You will note that, when a company has a return of capital, the nominal share price is reduced accordingly. Likewise if there is a share split or a subsidiary is hived off.

When a company floats, the shares are given a nominal value, like £1 or 25p. New shares may not be issued for less than the nominal value, which led to some tricky footwork when Segro took over Brixton Estates.

TJH

Oh okay....so in other words the value that I referred to earlier e.g. the "2 1/2P" pertinent to the LGEN share, is just the "nominal value" that you mentioned?

Also thanks for the additional remark mentioning "shareholder's premium" - I had seen that term (or similar) in balance sheet I believe.

e.g. "Share Premium Account"

I'll look into this some more later - am at work now.

thanks again, Matt

I'm glad you asked!

I always figured it was just the original listing price per share like you suggested but never looked into it.

The more you know!