I haven’t worked for this company for over 10 years now, but somehow ended up owning 19.996 shares of stock. I haven’t paid much attention to it, always figuring I’d sell it someday.
Last year they mailed me a letter offering shareholders who have less than 100 shares a program where they can either sell their shares or buy the difference. At the time I put it off. Then they reupped the program and I put it off again. Today I went to the link* that they gave and it said that it was expired.
So, how do I sell these the normal way? What kind of processing fee or percentage will I have to pay?** Do I need to sign up with one of those day-trader programs that were popular a few years ago? Do I have to go talk to a broker? What’s the easiest way to do this?
** BTW, I just read the back of this offer, and it says that “a processing fee of $2.25 per share … will be deducted …” to “…defray the cost of the program…”
$2.25 per share is absurd. There is absolutely no way it costs them even a tiny fraction of a minuscule percentage of that to execute the transaction. If you have any other options it’s probably worth your time to explore them.
That’s the transfer agent. That’s how these things are normally done. I don’t know if they can sell shares as I’ve only ever used them for transfers but when he calls them I’m sure they can tell him. For an odd lot (i.e., not a multiple of 100 shares), I’d be surprised if they can’t act as a broker and sell them but I honestly don’t know and don’t feel like looking it up.
For small transactions it should be straight forward. For larger ones you need to jump through hoops and get things like Medallion signature guarantees.
The one exception might be if physical certificates were issued but I don’t think that’s been done for decades. In those cases, you might be able to go directly to a broker with them but it’s been a while since I’ve had to deal with that sort of thing. And even there, you can file a lost certificate claim as long as the shares are in your name.
If he has 19.996 shares of stock, they are in a custodial account somewhere. He can’t sell the shares until he identifies the custodian that is actually holding them. And he can’t transfer a fractional share. At best he would be able to transfer the full shares to another broker and get the current custodian to liquidate the fractional share. (The fractional share is an entry on the custodian’s books somewhere.)
Rucksinator, I assume that these shares came from some employee stock purchase plan or maybe a retirement plan of some sort. You are going to have to find out who is holding the shares and contact them. There is an account with your name at some brokerage firm or other custodian somewhere. That should be on the letter you received (even if the specific web page is not working) or you might have to contact HR at your former employer. The custodian probably has some (expensive) program to let you liquidate the shares or you can ask what it would take to transfer the shares to another brokerage. For example, you can open a no-fee brokerage account at TD Ameritrade and have the shares transferred there and then execute a sell order.
I would also be surprised if you are not getting a periodic account statement from someone (unless you’ve moved and they’ve lost track of you). That should tell you who to contact.
Who do you think the transfer agent is? Unbelievable. Do you really think I pulled this out of my ass? I’ve dealt with shit like this more times than I care to remember. And as for fractional shares, I’m staring at half a dozen examples in my brokerage account right now. So where exactly are you getting YOUR information from?
I don’t know who the transfer agent is. If the shares aren’t registered directly in Rucksinator’s name, the transfer agent can’t help because they are in street name at some brokerage. We first have to identify who is holding the shares before they can be transferred to Rucksinator’s account if that is what they want.
I have no information about your anal problems. Consult a proctologist.
Yes, I’m sure you have fractional shares in your brokerage account. There is a pool of shares somewhere in your broker’s inventory a portion of which they assign beneficial ownership to you. But try to transfer a fraction of a share to another brokerage. I dare you to. Exchanges and depositories do not handle fractional shares. When you try to “sell” a fractional share, the broker will not put it up for sale on an exchange, but rather pay you itself.
I guess you’ve also never heard of DRIP’s - and no, that’s not a personal insult - look it up. Companies do in fact issue fractional shares (through their transfer agents) all of the time so you clearly have no clue of any kind.
Since he seems to have gotten these while working for Lexmark, if I understand the OP correctly, I don’t think it’s a stretch to imagine that their transfer agent is holding them in his name since that’s how DRIP’s are normally handled. However it IS odd that a company would be able to get his contact info and make such a ridiculous offer to him ($2.25/share is just absurd). TA’s are not known for being that sloppy with client info.
So there is at least a chance that the shares were purchased through some other institution and what happened was the account went dormant and was eventually treated as abandoned property. In that case, going to the transfer agent won’t help. It doesn’t seem likely that the shares are still with the original institution since they would be mailing him regular statements of some kind which he makes no mention of.
The Transfer may or may not be the custodial agent, but given that he has fractional shares, those shares at least have to be held by a custodian whether they are from DRIPs or retirement plans. The custodial agent is the person to contact. If that is also the transfer agent that’s fine, but if they’re different you want the custodian. The company itself should know who these people are since they presumably set the plan up while he was working there.
Yes I did, but that is a general statement about any holding of shares. You can hold them in your name (and may have the certificates), or you can hold them in street name in which case some custodian (usually a broker) holds the actual shares or has the electronic entry. In that case you are the beneficial owner, but not the owner as far as the transfer agent knows.
Since the OP holds fractional shares, those shares, at least and likely all of them, are definitely in a custodial account. The custodian will have to do the selling for him. Now it’s possible, that the custodian is the transfer agent, but it certainly doesn’t have to be that way. The OP has to find out who the custodian is. If it is the transfer agent, that’s fine. If it’s not the transfer agent, then the transfer agent can do nothing for him without the custodian. Of course the transfer agent, might know who the custodian is. Contacting the transfer agent, might help, but it might not. Contacting the custodian will definitely help, if the OP can learn who the custodian is. Whoever set up the program should know who the custodian is.
Yes. And all you’ve succeeded in doing is introducing some useless jargon into the conversation, to wit “custodial agent” which means nothing more than a bank or other institution which holds the assets on behalf of a client - pretty much what I’ve already said and what’s said in that quote. In fact nothing you’ve said is more than a rehashing of what has already been said.
I expect that will happen several more times before this thread is done though so I suppose I should go put my popcorn in the microwave now huh?
I agree strongly with this. $2.25 per transaction? Great. Even $10-20 per transaction (basically any number of shares at once) isn’t too unreasonable these days. But per share? Don’t do that. I’m surprised it’s even legal.
Despite the personal abuse, I will try to help you understand. Even if you don’t care to, perhaps someone else can benefit.
The shares in your brokerage account are not registered in your name. They are registered in what is called “street name.” Essentially, that means the registered owner is the broker or a depository your broker uses. Here is an SEC page that talks about forms of ownership. On its own books, your broker assigns what is known as “beneficial ownership” to you. In other words, your broker is the registered owner of all the stock its customers own (unless they have made special arrangements to have ownership transferred to their names). And the broker has records that say “Of the 1,000,000 shares of MSFT in our name, deltasigma owns 87.33.” MSFT has no idea you are the beneficial owner of these shares, nor did it ever issue 87.33 shares of stock.
You want to talk about DRIPs, sure we can talk about DRIPs. Let’s go over one.
Googling the first DRIP prospectus that I found was for Coca-Cola (KO). If you don’t think this is a representative DRIP, then please provide a link to another prospectus.
The Plan Administrator purchases the DRIP shares through a brokerage firm, KO does not issue them to participants:
Hence the fact that you may have a fractional share credited to your account is no proof that the company involved ever issued a fractional share.
Furthermore, the shares in your DRIP account are not registered in your individual name, but rather represent your proportional interest in the aggregate holding of the Plan:
And what happens when you want to close your account and take your shares and go away?:
Note that they are apparently unwilling to issue you a certificate (or transfer to book-entry) any fractional shares. That’s because fractional shares are only an accounting fiction on their books.
But what if you don’t want to close your whole account?:
Notice that they won’t issue you a certificate for fractional shares. They can’t.
Not sure this is useful–probably not, if I understand the conversation at all. But there are still such things as paper stock certificates. My wife was issued one last year–complicated situation, a relative gave her a gift of stock in a company in which he had an interest. We registered (? maybe not the right word) the shares with Vanguard, were we invest and which offers brokerage services. We did have to get a medallion guarantee, but this wasn’t so hard.
Which is why I said “(through their transfer agent)”
I’m well aware of how fractional shares are handled. Most people don’t care about that though. They reinvest their dividends and see they’ve gotten 1.246 shares or whatever so from THEIR point of view, they’ve been issued a fractional share. This also happens when you get reverse splits and in other situations. That’s most likely how I got many of mine since I have several penny stocks and other shit I never bothered to get rid of.
The point here to try to simply things for people and not, in SDMB fashion, make them more complicated than they need to be. I’ve worked for brokerage houses in addition to being an active investor for the past decade so if you think you’re telling me anything I don’t already know, I’m sorry to disappoint you.
Did she specifically request them? You can still get them issued if you want them - or at least I think so. I’m just surprised anyone would want them. I’d be even more surprised if they were issued sua sponte (w/o a request). If it was a gift, I’m guessing it had to be requested.
I spent at least a half hour the last time I had to get Medallion sigs, but I was doing about 4 or 5 transactions and that was before I had photo id so maybe that was part of the issue. (No really my name is Doris - don’t know why they didn’t believe me. )
I’ll try once more. The transfer agent’s job is to record for the company who “owns” the stock and handle delivery of actual paper shares or update an electronic record. A transfer agent generally has nothing to do with the actual buying and selling; it is more like UPS making a delivery to you when you buy online. It has to know who’s bought the stuff, but is not selling (or buying) itself or even in the company’s name. Generally transfer agents are banks or trust companies and not brokers.
I say “owns” in the above because often for individual investors, the transfer agent has no idea that you own the stock. Generally individual investors leave their stock in “street” name. That means the transfer agent only records your broker as the owner of the stock. It has no idea who you are. You do this so (i) when you want to sell the stock, you don’t have to deliver (either physically or electronically) the actual shares; the broker takes care of that through the transfer agent and (ii), the dividends are paid directly to your broker (because the transfer agent has the broker recorded as the owner), and the broker can invest the money for you or rarely nowadays mail you a check. The broker is your custodian and you are the “beneficial owner.”
Companies do not issue fractional shares even if they have DRIPs (dividend reinvestment plans). If you are in a DRIP, then some agent usually a broker (and most usually not the transfer agent) gets the actual cash dividends that would have gone to all those enrolled in the DRIP and buys as many already issued shares in the stock market as it can. It allocates these shares to the beneficial owners which generally means fractional shares to each.
Again, as far as the transfer agent knows the brokerage firm acting as the custodian for the DRIP is the owner of record of the shares. You can contact the custodian and get any full shares issued to you in your name (which the transfer agent will then record), but you cannot get the fractional shares. If you want to sell the fractional shares (or the full shares that the custodian is holding), you contact the custodian. The custodian will sell the shares in the stock market and send the money to you. The transfer agent will record that these shares are no longer owned by the custodian and are now owned by whomever bought them. The transfer agent will not know you sold them because it never knew you owned them. (And if in fact you happen to contact the custodian just when it was going to invest some of the dividend money it received, it probably won’t even sell any shares. I will “purchase” them from you for its next allocation amongst those remaining in the DRIP. In this case the transfer agent will not be involved at all.)
A retirement plan like a 401K in which you can purchase fractional shares would work the same way. If you own stock in street name (that is the broker holds the shares for you), it would also work this way. Your broker is your custodian.
The only reason an individual investor would tend to contact the transfer agent is if you owned the shares in your own name and had share certificates (or the electronic ownership was recorded in your name) and you wished to transfer the shares to someone else without going through the stock market. For example, if you were giving them to a child or a charity. The transfer agent then would record the new owner. If you wanted toe sell the shares you have, you wold contact a broker who would do so for you. You’d deliver the shares to the broker and it would handle dealing with the transfer agent. The reason for this is they want to minimize the actual physical movement of pa;per shares. Most likely the new beneficial owner wouldn’t care to have paper certificates, and your certificates would simply be destroyed after the new owner was recorded.
You’re overlooking the fact that the transfer agent is also probably going to be the registrar. And again, this has all been said before - at least anything that’s relevant to the OP. But thanks for trying to educate me.
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