Nancy Barber (nlbarber) wrote,
Nancy Barber
nlbarber

Economics of stock sales

Small holdings are a nuisance to corporations, who still have to communicate with each shareholder, print annual reports for them, and keep records on them. So they'd like to encourage these people to sell, and so they send out offers to help with the process. The current one is from Agere, which was a spin-off of Lucent (that is, I have it only because I held Lucent at the time), which then did badly and had a reverse split of 1-for-10. I currently have 25 shares.

Agere will sell the 25 shares for me at whatever the market rate is, and will charge me a mere $2.50 per share processing fee up to a maximum of $40. (Market price is about $12.00/share.) And they warn that your broker might also assess a fee for you to participate in this--last such charge I had was $50. So I can get rid of the 25 shares of Agere for $90 in fees, almost 1/3 of what the sale will generate.

On the other hand, I can just sell these myself for a flat fee of $9.95 at the discount broker.

(OK, OK, buyout offers are aimed at those who use full-service brokers, and the $90 might look like a bargain to them. I just read the terms for the amusement value, and discard.)
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