In a clear sign that the shares of Northern Wreck are nothing more than the plaything of speculators, and the last haven for those with zero risk aversion, the shares rose by 44% this morning to over 90p on news that there may be a chance for a private takeover of the bank.
The Treasury have invited new bidders to come forward, and have unveiled a "plan" to keep the corpse breathing.
The government plans to turn the £25BN loaned by the Bank of England into bonds, that will be sold to investors and guaranteed by the Treasury.
Bidders will have until February 4th to submit their full proposals.
However, the Treasury insists that it benefits from any increase in Northern Rock's share price, and has a say over the payment of possible dividends as well as a "range of other provisions appropriate for the provision of financial support of the kind contemplated."
The risk of any mortgage defaults will remain with the taxpayer.
Should negotiations with a private buyer fail, the Treasury said:
"the Government would bring forward legislation which would empower the Treasury, by order, to take Northern Rock into temporary public ownership."
The question that the shareholders needs to ask themselves is this:
Do you seriously expect to receive more than pennies for the shares, even if a private bidder comes forward and obtains the requisite financing?
The risk of nationalisation is still great, and to assume otherwise is utter madness.