Odd lot tenders

[beerbaron]

Does anyone else have HCT in an interactive brokers account? I'd like to submit my tender instructions, but its not showing up in the corporate actions tab. Curious if its showing for anyone else and I need to submit a ticket or if they just haven't populated it yet.

 

How did you buy the share I tough American Realty Capital Healthcare Trust was a Publicly registered, non-traded REIT.

 

BeerBaron

[watsa_is_a_randian_hero]

I do.  I have contacted them.  The response I got was "they are aware of it" but it wasn't listed as a corp action by the depository as yet, and so they are waiting on that.  I dont know; the response seemed kind of weak to me.

 

Has anyone else with IB had trouble toggling between multiple accounts in account management lately?  I have tried it in 3 different browser programs and am having trouble. 

[wachtwoord]

Does anyone else have HCT in an interactive brokers account? I'd like to submit my tender instructions, but its not showing up in the corporate actions tab. Curious if its showing for anyone else and I need to submit a ticket or if they just haven't populated it yet.

 

How did you buy the share I tough American Realty Capital Healthcare Trust was a Publicly registered, non-traded REIT.

 

BeerBaron

 

They switched to NASDAQ April 7th http://www.marketwatch.com/story/american-realty-capital-healthcare-trust-completes-first-day-of-trading-on-nasdaq-amid-heavy-volume-2014-04-07-23183510

[randomep]

 

Hi all, can someone plz explain what we are talking about here?

 

Are we talking about holding a small number of shares and selling it? Or are we talking about offering to buy a small number of shares?

 

thanks in advance for enlightening me

 

[matjone]

You mean the odd lot strategy in general?  A company will announce a tender offer and will say they are giving preference to holders of fewer than say 100 shares.  So you buy 99 shares below the tender price and tender them for a small profit.

[randomep]

You mean the odd lot strategy in general?  A company will announce a tender offer and will say they are giving preference to holders of fewer than say 100 shares.  So you buy 99 shares below the tender price and tender them for a small profit.

 

So this thread is talking about buying the shares AFTER the company announces the tender offer?

 

If so I guess that is the same type of work as clipping coupons to save money. Or opening a brokerage account to take advantage of a free gift. I have TD Ameritrade to this day because they offered me an ipod if I opened with them.

 

 

[bizaro86]

So this thread is talking about buying the shares AFTER the company announces the tender offer?

 

If so I guess that is the same type of work as clipping coupons to save money. Or opening a brokerage account to take advantage of a free gift. I have TD Ameritrade to this day because they offered me an ipod if I opened with them.

 

Pretty much, it wouldn't scale. For instance, in the HTC example immediately above, shares are trading around $10.30. You can buy 99 for $1019.70, and sell into the tender for $1089.00. Basically, its a short term, high annualized rate of return investment, but at a very small scale, since the total profits are limited (to $70 in this case).

[jmoy911]

Has anyone received a payout yet for the AOBI offer?

[matjone]

No, but I spoke to my broker and they said it should be paid sometime during the first week of May.

[jmoy911]

Good to know, thanks matjone.

 

No, but I spoke to my broker and they said it should be paid sometime during the first week of May.

[Ghost]

Anybody know how accepted tender offers are treated from a tax point of view?  Cap gains, dividend, regular income?

[siddharth18]

Anybody know how accepted tender offers are treated from a tax point of view?  Cap gains, dividend, regular income?

 

I'm not a tax-expert and this isn't legal advice but I believe it's treated just as you'd have sold the shares in the open market. Meaning if you tender shares that have been held for at least 1 year, you get long term cap gains tax rate and if it's less than 1 year then it's short term capital gains tax rate. In no case it's dividend though.

[Ghost]

I thought it was capital gains as well, till I came across the following. 

 

https://www.clearstream.com/ci/dispatch/en/cic/CIC/Tax/ICSD/United_States_of_America/Section_302_FAQ.htm

[wachtwoord]

GSOL tender offer released.

[abitofvalue]

GSOL tender offer released.

 

thanks for sharing.

[netnet]

Any suggestions as to why the spread is so big on this name?

[wachtwoord]

Any suggestions as to why the spread is so big on this name?

 

Don't know but the spread has existed for a long time see: http://www.oldschoolvalue.com/forum/discussion/1291/gsol-tender-offer-spread-still-exists-

 

I bought 50 @ 8.07 because odd lot was 50 shares or less the last time they did this in 2010 and they pre-announced this in March. Yesterday when they actually announced it they defined odd lot as less than 100 shares so I bought 49 more @ 8.37.

[hoveite]

I think you are probably right about the odd lot limit for GSOL being 99 this time, but there is maybe some potential ambiguity.

 

The offer for tender posted on sec.gov yesterday includes the following sentence :-

 

"This preference is not available to partial tenders or to beneficial or record holders of an aggregate of 51 Shares or more, even if these holders have separate accounts or certificates representing fewer than 100 Shares."

 

This seems like an odd sentence, as one wouild normally expect the two halves of a sentence like this to specify the same limit - especially if "even if" is to have its usual meaning.

 

I suspect it is a drafting error as every other reference to the limit implies that an odd lot is 100 shares leading to a limit of 99 shares - but there is the possibility that a broker will take an over-cautious view on this given the sentence I quoted.

[wachtwoord]

I think you are probably right about the odd lot limit for GSOL being 99 this time, but there is maybe some potential ambiguity.

 

The offer for tender posted on sec.gov yesterday includes the following sentence :-

 

"This preference is not available to partial tenders or to beneficial or record holders of an aggregate of 51 Shares or more, even if these holders have separate accounts or certificates representing fewer than 100 Shares."

 

This seems like an odd sentence, as one wouild normally expect the two halves of a sentence like this to specify the same limit - especially if "even if" is to have its usual meaning.

 

I suspect it is a drafting error as every other reference to the limit implies that an odd lot is 100 shares leading to a limit of 99 shares - but there is the possibility that a broker will take an over-cautious view on this given the sentence I quoted.

 

I think it's a copy-paste error from last time (2010) thank for telling me though. In the end the broker doesn't decide who qualifies for either preference treatment or pro-ration, it's the company doing the buy back. If you find additional proof that odd lot is indeed 50 or less, please post it here as I can dump my 49 extra shares then before the commencing of the offer (and as it seems, still make a profit on the extra 49 shares as well).

[hoveite]

In the end the broker doesn't decide who qualifies for either preference treatment or pro-ration, it's the company doing the buy back.

 

But don't we have to rely on our broker to do the following :-

 

"Any Odd Lot Holder wishing to tender all of its Shares pursuant to the Offer should complete the section entitled “Odd Lots” in the Letter of Transmittal and, if applicable, in the Notice of Guaranteed Delivery."?

 

And I guess whether a broker will do this or not depends on their reading of the offer.

[jmoy911]

It's treated as a short term gain.

 

Anybody know how accepted tender offers are treated from a tax point of view?  Cap gains, dividend, regular income?

 

I'm not a tax-expert and this isn't legal advice but I believe it's treated just as you'd have sold the shares in the open market. Meaning if you tender shares that have been held for at least 1 year, you get long term cap gains tax rate and if it's less than 1 year then it's short term capital gains tax rate. In no case it's dividend though.

[siddharth18]

I glanced at the GSOL's SC TO-I form and it doesn't mention some of the conditions that are included in other tender offers. For example, it doesn't include a condition where they can suspect the tender in case the NASDAQ/DJIA/SP500 drops 10%.

 

Only ones mentioned are legal, regulatory or takeover issues.

[matjone]

Hancock Fabrics is doing one with a decent spread, but I think I am going to skip it after glancing at their financials.  Anyone else doing it?

[JBird]

Hancock Fabrics is doing one with a decent spread, but I think I am going to skip it after glancing at their financials.  Anyone else doing it?

 

Thanks for bringing it to light. Stockholders vote on the idea on August 15th at the AGM.

 

http://archive.fast-edgar.com//20140509/AVZZE22CZ222VJZZ2K2P2ZZZGSA9Z6Y7ZU62/

[benhacker]

Anybody here have an updated status on the AOBI cash out?

 

I didn't participate but had a client do an inbound ACAT and funded their account with a few shares and I couldn't liquidate them at IB... so I waited.  No cash yet.

 

Curious if others are monitoring.

 

Ben