Hi jpomper, Your point on the long-lasting effects of ING's share dilution is very interesting. Thank you for sharing your thoughts. This looks like a very good explanation why ING keeps suffering.
I tried to follow your calculation. And received a different result. You imply that most of the 1.73B shares issued at average $4.3 price in 2009 is already resold, and the huge seller overhang is disappearing, and you concluded that from the end of 2012 we get a different price regime... hopefully a return to normal bank valuation metrics.
I tried to follow your volume numbers. By my current data, the european exchages trade cca. 30M/day, plus NYSE trades 4M/day ING shares; this might imply a daily total turnover of 17M shares (if we discount the double counting buy+sell)
So, in average, in 100 days 1.7B shares can be sold; and since Apr. 2010, (after the 6 month lockin period) we had cca. 500 business days. This should be more than enough opportunity for those who wanted to sell out.
With a different approach: On NYSE, in the year before the rights issue in 2009, ING trade volume was cca. 500M/year. In 2010 volume jumped to 800M/year, in 2011 traded 850M/year. The 2012 numbers suggest a 6-month volume of 450M, suggesting a 900M/year total.
So, if I assume that the NYSE 2010 volume jump total of 300M shares resulted solely from selling the overhang, then this means cca. 150M shares sold.
In Europe the daily volume is cca. 7 times larger than on NYSE. This might suggest that pro-rata in EU the overhang volume sold is cca. 1.1B shares.
This might suggest that at least 1.2B shares bought at rights issue was resold by the by summer 2011. And if the logic is correct, then by summer 2012 all 1.7B is already resold.
Conclusion: the effect of the rights issue of 1.7B shares at $4.3 already disappeared. It is no more a major factor to determine ING's price trajectory.