Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Shares of private company
Old 10-04-2010, 09:57 PM   #1
Recycles dryer sheets
 
Join Date: Apr 2010
Posts: 412
Shares of private company

I have some shares (certificates) from a company I worked for when it was an early stage tech startup. The company is still private, but doing well and plans to go IPO or sell in 1-2 years.

Question - what are pros and cons of depositing the shares to my broker (Fidelity claims to place private equities)? Any experience to share on this topic?
__________________

__________________
wanaberetiree is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-04-2010, 10:51 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Brat's Avatar
 
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 5,914
I have no personal experience with this issue, but who holds the shares now?

If it is you and you hold them in your safety deposit box there is a risk of loss. Eventually you will surrender them if they are bought out or IPO'd. I think that it would be easier to handle this if they were in the hands of the like of Fidelity.

However, if they stay private and want to sell them to, say your next door neighbor, how would Fidelity do that?

I suspect that they are a book entry in your former employer's ledger. What would concern me is transfer of title should you die. If they were in the hands of Fidelity (or their ilk) I think your estate planning would be simpler.
__________________

__________________
Duck bjorn.
Brat is offline   Reply With Quote
Old 10-04-2010, 11:29 PM   #3
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Quote:
Originally Posted by wanaberetiree View Post
I have some shares (certificates) from a company I worked for when it was an early stage tech startup. The company is still private, but doing well and plans to go IPO or sell in 1-2 years.

Question - what are pros and cons of depositing the shares to my broker (Fidelity claims to place private equities)? Any experience to share on this topic?
Until it's time to register/sell your shares, all Fidelity can do is hold them for you. You could do that in a safe deposit box or, if they're lost/stolen, have the company cancel/replace them.

By any chance is your company planning to split their shares soon? Another paperwork reason to hold on to them yourself instead of giving them to Fidelity.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 10-05-2010, 02:24 PM   #4
Recycles dryer sheets
 
Join Date: Apr 2010
Posts: 412
Quote:
Originally Posted by Nords View Post
By any chance is your company planning to split their shares soon? Another paperwork reason to hold on to them yourself instead of giving them to Fidelity.
As a matter of fact, they already had split and told that they won't issue new certificates and do keep track by grand dates. One on reasons, I did not deposit them to a broker. I did ask the co for advice and they said it's OK to deposit.

Thanks for good points.
__________________
wanaberetiree is offline   Reply With Quote
Old 10-05-2010, 03:45 PM   #5
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Quote:
Originally Posted by wanaberetiree View Post
I did ask the co for advice and they said it's OK to deposit.
Your company is the last place I'd go to for advice on how to handle their shares.

Issuing new share certificates is done all the time and might not even require the board's vote, let alone shareholder concurrence.

The reason I asked about share splits is because Facebook is contemplating a 5:1 split that would give employees five time as many incentive shares. Of course that doesn't change the total dollar value of the shares before or after the split, but hundreds of investor-psychology experiments have confirmed that shareholders think share splits are more valuable and bid up the price accordingly.

A blogger I follow pointed out that the last thing a company needs is to offer incentives to employees who can't appreciate the cynical marketing behind share-split math.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Private company going out of business question. robls FIRE and Money 8 12-16-2009 05:42 AM
Financial Advisor's Privacy Policy- How Private is Private? cashflo2u2 FIRE and Money 7 09-25-2009 10:11 AM
I-Shares and Power Shares vs Vanguard ETF Hydroman FIRE and Money 6 05-23-2007 09:37 AM
I-Shares and Power Shares vs Vanguard ETF Hydroman Life after FIRE 0 05-22-2007 10:21 PM

 

 
All times are GMT -6. The time now is 08:16 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.