Question:
Was wondering your opinion regarding when selling shares and having the intention of selling all shares in a particular stock, to sell all but one, therefore being included in any future share purchase plans or offers etc?
Response:
There are both pros and cons with the above strategy.
The minimum marketable parcel in any one company is currently $500. If you choose to sell a proportion of your shares leaving a value less than $500, the company has the ability to at any time can acquire those shares without your permission.
Top Australian Brokers
- City Index - Aussie shares from $5 - Read our review
- Pepperstone - Trading education - Read our review
- IC Markets - Experienced and highly regulated - Read our review
- eToro - Social and copy trading platform - Read our review
Maintaining a small holding in a company will also mean that you will receive all communications entitled to shareholders (annual reports etc),this can add to the mail already received and may be a cause of frustration for some. This has become less of an issue with most registries switching to electronic communication methods.
The benefits of such a strategy are that as a shareholder you will be entitled to receiving offers for corporate actions that can prove beneficial to shareholders, however it is important to note that some companies may scale down entitlements for smaller share parcels.
By Stephen Karpin, General Manager, CommSec
Important Information
The views expressed in this article are those of Stephen Karpin, a representative of Commonwealth Securities Limited (CommSec) ABN 60 067 254 399 AFSL 238814. CommSec is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 23495 (the Bank) and a Participant of the ASX Group. As this information has been prepared without considering your objectives, financial and taxation situation or needs, you should, before acting on this information, consider its appropriateness to your circumstances and if necessary, seek appropriate professional financial and taxation advice. CommSec Margin Loan is a facility provided by the Bank and is administered by CommSec. Please be aware that a CommSec Margin Loan exposes you to unfavourable movements in the value of shares and units in managed funds, and possibly to margin calls. Please be aware that you are personally liable for any shortfall that occurs should your entire portfolio have to be sold to answer a margin call where there have been falls in the market value of your investments. Only investors who fully understand the risks associated with gearing into investments should apply. All applications are subject to the Bank’s credit approval process. Fees and charges apply. Please consider the Product Disclosure Statement, and terms and conditions, issued by the Bank and available from www.commsec.com.au before making any decisions.
