Notice of Oddlot Tender/Purchase Offer

[Armitage]

Ok, I own a few shares of Boeing through my Schwab brokerage account. I recently got a letter from them with the following subject line:

Notice of Oddlot Tender/Purchase Offer and Special Schwab Program

The Boeing Co. has offered to holders of 99 shares or less the opportunity to tender all of their shares or purchase additional shares to round their holdings to 100 shares. Alternatively, you may sell your shares via Schwab or purchase additional shares via Schwab to round your holdings to 100 shares at a reduced commission price.

At a later point it says that I can decline and do nothing at this time.

So what is the point of this? I guess I could buy more boeing at a reduced commision if I wanted. Is that all this is about?

 

[RbSX]

Originally posted by: Armitage
Ok, I own a few shares of Boeing through my Schwab brokerage account. I recently got a letter from them with the following subject line:

Notice of Oddlot Tender/Purchase Offer and Special Schwab Program

The Boeing Co. has offered to holders of 99 shares or less the opportunity to tender all of their shares or purchase additional shares to round their holdings to 100 shares. Alternatively, you may sell your shares via Schwab or purchase additional shares via Schwab to round your holdings to 100 shares at a reduced commission price.

At a later point it says that I can decline and do nothing at this time.

So what is the point of this? I guess I could buy more boeing at a reduced commision if I wanted. Is that all this is about?

Boeing is trying to get all shareholders to own atleast 100+ of their stock. They are giving you the oppurtinity to sell your stock back to boeing, or you can purchase more stock at a reduced commission price.

Boeing wants all of its share holders to own atleast 100 shares. Why? I don't know.

 

[Cuular]

Stocks are generally traded in "lots" which is 100 shares. A number not evenly divisible by 100 is considered "odd" and is harder to sell or trade. There are services whose sole job it is to try and match odd lots up to sellers and buyers.

 

[Armitage]

Well, in that case, my lot can stay odd
Thanks

 

[kranky]

It's not that they are really fixated on the 100 shares number, but that they would like to get rid of small shareholders because it costs companies a lot of money to do everything they need to do for a shareholder - annual reports, proxy statements, sometimes process dividends, etc.

It's true that shares trade easier in round lots, but they are really interested in getting rid of the very small shareholders.

 

[Evadman]

I own one share of 34 different companies. I like voting

 

[glenn1]

Ignore the tender offer. It's extremely rare to get a better deal via tender then you could via a normal buy or sell, and you surrender control over the timing and fill price to whatever system the company devised to effect the tender.