Author Topic: Odd lot tenders  (Read 182037 times)

matjone

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Re: Odd lot tenders
« Reply #20 on: April 26, 2013, 02:50:30 PM »
Wow, 32 accounts, that is insane.  Thanks to everyone for the tips.


infinitee00

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Re: Odd lot tenders
« Reply #21 on: April 26, 2013, 04:27:17 PM »
How do you even create 32 accounts?  :) Were these client accounts? I have 3 accounts with different brokerages and yet I buy only from one account for fear of being rejected by the company. Wonder if anyone had theirs rejected by the company when bought with different brokerages.

walt373

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Re: Odd lot tenders
« Reply #22 on: April 26, 2013, 08:45:43 PM »
A lot of busywork haha. Some were like advisor accounts and some individual but I put my real name and info for all of them.

ragnarisapirate

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Re: Odd lot tenders
« Reply #23 on: April 26, 2013, 11:40:02 PM »
I have done a lot of these in the past as well. Even split up the shares- however, do be weary of some of them... When they don't go through, you can be screwed.

I generally avoid ones where I think there is a chance it might not happen (say, a terrible business making a last grab at reducing expenses), ones that are based in China (from my fear of the reverse merge cos, and a few other situations... Assurance America is a great example of a company that didn't follow through with it and the price got killed.

It seems that a lot of people have grasp on to these things and taken a good bit of the profit out- they used to be real gold mines (2010 sticks out to me)
Assurance America did go private last month. Made a few bucks, but also got a bit lucky: managed to buy a couple of times below the cash-out price and sell above. But it was certainly a bit risky, but risk/reward was still asymmetrical imo.

They did recently stop filing with the SEC... however, if you go back far enough in their filings, they had an odd lot tender that didn't work out- it was for a good premium to market, and when they didn't do it, the share price collapsed.

ragnarisapirate

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Re: Odd lot tenders
« Reply #24 on: April 26, 2013, 11:44:30 PM »
A lot of busywork haha. Some were like advisor accounts and some individual but I put my real name and info for all of them.

I agree on the busywork... I think that I have like 25 personal accounts through TDAmeritrade for this stuff. I honestly can't remember now. You buy shares in 1, then split them up into all the others (for free) and save a boatload on commissions (and worries about executions).

matjone

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Re: Odd lot tenders
« Reply #25 on: April 27, 2013, 08:00:52 AM »
Does ameritrade charge any monthly/annual fees on those accounts?

compoundinglife

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Re: Odd lot tenders
« Reply #26 on: April 27, 2013, 08:47:04 AM »
A lot of busywork haha. Some were like advisor accounts and some individual but I put my real name and info for all of them.

I agree on the busywork... I think that I have like 25 personal accounts through TDAmeritrade for this stuff. I honestly can't remember now. You buy shares in 1, then split them up into all the others (for free) and save a boatload on commissions (and worries about executions).

Wow I thought I had a lot of accounts, you guys have be beat by a mile.

infinitee00

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Re: Odd lot tenders
« Reply #27 on: April 27, 2013, 09:01:40 AM »
Walt/Ragnar

This is very interesting. I didn't have a clue this could be done or if it's even legal to do so :).

I am curious, how did you guys open so many personal accounts under one name ( I mean isn't every account linked to same SSN that will prevent having multiple accounts) or are these some sort of sub-accounts? If it's a sub account doesn't it mean that during an odd lot tender, it gets counted as a single account and one has to rely on the brokerage turning a blind eye to this ?

Were there any differences between these accounts e.g. cash vs margin or forex/commodities etc?

Do you get charged a commission/fee separately for each account?

Is each account separately insured up to $500K by SIPC or does the 500K apply to the total amount held by that investor/customer in all accounts?

Has anyone tried to break a large 'all-or-none' trade into smaller number of 'all-or-none' trades using multiple accounts/sub-accounts ( I am mostly interested in multiple accounts because of this)?





compoundinglife

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Re: Odd lot tenders
« Reply #28 on: April 27, 2013, 09:16:25 AM »
Walt/Ragnar

This is very interesting. I didn't have a clue this could be done or if it's even legal to do so :).

I am curious, how did you guys open so many personal accounts under one name ( I mean isn't every account linked to same SSN that will prevent having multiple accounts) or are these some sort of sub-accounts? If it's a sub account doesn't it mean that during an odd lot tender, it gets counted as a single account and one has to rely on the brokerage turning a blind eye to this ?

Were there any differences between these accounts e.g. cash vs margin or forex/commodities etc?

Do you get charged a commission/fee separately for each account?

Is each account separately insured up to $500K by SIPC or does the 500K apply to the total amount held by that investor/customer in all accounts?

Has anyone tried to break a large 'all-or-none' trade into smaller number of 'all-or-none' trades using multiple accounts/sub-accounts ( I am mostly interested in multiple accounts because of this)?

You can open multiple taxable accounts at probably any brokerage. I did it just by stopping by my local branch and asking to open an additional account. I believe in the case of odd lot tenders it works because they are different account #s and the stock is registered to the "street name" or the brokerage's name so the company doing the tender does not know it is the same party. You can ask to have the stock specifically registered to you in which case this might not work.

I think the multiple accounts even at different brokerages probably violate the terms of most odd lot tenders so this might not be above board. But I have tried it before with multiple accounts in the same brokerage and it did work.

ragnarisapirate

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Re: Odd lot tenders
« Reply #29 on: April 27, 2013, 09:53:53 AM »
Walt/Ragnar

This is very interesting. I didn't have a clue this could be done or if it's even legal to do so :).

I am curious, how did you guys open so many personal accounts under one name ( I mean isn't every account linked to same SSN that will prevent having multiple accounts) or are these some sort of sub-accounts? If it's a sub account doesn't it mean that during an odd lot tender, it gets counted as a single account and one has to rely on the brokerage turning a blind eye to this ?

Were there any differences between these accounts e.g. cash vs margin or forex/commodities etc?

Do you get charged a commission/fee separately for each account?

Is each account separately insured up to $500K by SIPC or does the 500K apply to the total amount held by that investor/customer in all accounts?

Has anyone tried to break a large 'all-or-none' trade into smaller number of 'all-or-none' trades using multiple accounts/sub-accounts ( I am mostly interested in multiple accounts because of this)?

If I answer all the questions for you, then the answers will be worth less (please note the difference between "worthless" and "worth less") to you. :)

I will add that this has worked for me in the past and that to my and my national broker's knowledge, there is nothing illegal or immoral about any of it. I and anyone else that does this (even in 1 acct) are simply playing by the rules that the companies set in their own tender offers and reverse forward share splits. If anything, I would argue that we are helping them retire shares at an undervalued price- everyone I have participated in, there would have been substantial value created by a buyback. If the company isn't wanting to buy back a ton of shares, then they could always treat shares that are in street name as 1 block (which, as I pointed out, has happened to me before with a NOL cash box), thus getting around people breaking the shares up into multiple accounts.

It should be noted that there can be a substantial amount of risk involved with these. Sometimes, they don't happen at the price they should have, don't happen at all, or, shares are treated differently than you think they might be. Sincerely, I can't stress enough to do your homework on these deals!
« Last Edit: April 27, 2013, 09:56:16 AM by ragnarisapirate »