Preferred Stock Investing-The Good , The Bad and The In Between 2021

[tutan]

...the new SEC ruling on disclosures is playing havoc on some OTC issues though.

Sold SLMNP assuming that they couldn't be traded. I am glad to be rid of them even though I only had 5 shares.

 

[Mulligan]

Sold SLMNP assuming that they couldn't be traded. I am glad to be rid of them even though I only had 5 shares.

Most brokerages are allowing selling but no purchasing. SLMNP came up on the bad boy list just a couple days ago without warning.

 

[tutan]

Most brokerages are allowing selling but no purchasing. SLMNP came up on the bad boy list just a couple days ago without warning.

Bought them last July for $1010 a share. Let them go at $1005. It's good to not worry about them. I learned about sock drawer preferreds from you, which are those I just want to put away and forget...of course collect the dividends.

 

[Mulligan]

Bought them last July for $1010 a share. Let them go at $1005. It's good to not worry about them. I learned about sock drawer preferreds from you, which are those I just want to put away and forget...of course collect the dividends.

Its a shame but I think you made the correct choice. I only kept 2 that went dark. LTSH will mature if they stay solvent. My 200 shares of BANGN is just a mantel purchase I never wanted to part with. Like the history of its original genesis of being town rail line/utility in 1911 and preferred still lives with a tiny float, now untradeable but yet investment grade…whatever…

 

[pb4uski]

Its a shame but I think you made the correct choice. I only kept 2 that went dark. LTSH will mature if they stay solvent. My 200 shares of BANGN is just a mantel purchase I never wanted to part with. Like the history of its original genesis of being town rail line/utility in 1911 and preferred still lives with a tiny float, now untradeable but yet investment grade…whatever…

So now I'll probably have two of them... WTREP (delisted) and SLMNP.

Yup... WTREP and SLMNP may become my sock drawer issues by default... ...though I am hoping that WTREP ultimately gets called.

BTW, for those you still have WTREP have you been credited for the 9/30 dividend yet? I haven't.

 

[yakers]

Most brokerages are allowing selling but no purchasing. SLMNP came up on the bad boy list just a couple days ago without warning.

If you can sell them someone must be abe to buy them?

 

[Mulligan]

If you can sell them someone must be abe to buy them?

Most brokerages have disallowed buying. “Expert market” allows it. No bid or ask prices are allowed to be shown. This puts them in the grey market with no market makers. So it will be like trying to grab a fish in the ocean by hand.

 

[Coolius]

I was able to enter a GTC buy order for SLMNP at Schwab.


So just stuck in a very lowball bid for the fun of it.
If it ever assigns, it will remain in the IRA and be passed onto my heirs for whatever they can salvage, LOL.

 

[pb4uski]

Funny.... I have a GTC sell order for SLMNP at Schwab.

 

[youbet]

I put in a GTC sell order for one share at Schwab just to watch. It seemed to enter ok. I have a significant position in SLMNP so this finally caught my attention.

 

[pb4uski]

What do you mean by enter ok?

When I entered a sell order for SLMNP online it acted like a normal order and showed up on my order status dashboard.... but then it canceled itself within a couple minutes with no action on my part... this was during the trading day. I called in and they said that one had to call in for SLMNP.

 

[youbet]

^^^^^ I entered a GTC order to sell one share at $1020 on 9/30 at 3:35 pm. Just checked and it’s still open. Just the same, I’ll call tomorrow and ask about it.

 

[Mulligan]

Yup... WTREP and SLMNP may become my sock drawer issues by default... ...though I am hoping that WTREP ultimately gets called.



BTW, for those you still have WTREP have you been credited for the 9/30 dividend yet? I haven't.

PB, I got my WTREP divis in my 3 accounts at TD. So hopefully my other account will pay tomorrow.

 

[youbet]

Well....... All this new-to-me activity, and trying to learn about it, hopefully is delaying dementia more effectively than doing a crossword puzzle everyday! Will I ever learn that as a geezer it's time to cut back on anything more complicated than buying some VTI?

Wondering WTF to do with my SLMNP, I spent some time on otcmarkets.com reading about stuff like "expert market," "dark or defunct," "pink current," and "pink limited." Talked to Schwab. Searched the web. Etc.

Schwab told me I could place sell orders online but needed to call in buy orders.

Everything I read and the info from Schwab was congruent with Mulligan's comments (no surprise there).

Sooooo...... What to do now? If I thought LyondellBasell would just continue the divs and would eventually get their act together with reporting requirements and eventually upgrade to "pink current," I'd gladly just hang on to my shares. I didn't press Schwab for info on how difficult it might be to sell them or the potential price. The "investor" section of the LyondellBasell web site had zero mention of SLMNP, only their common shares, so no help there. It's like SLMNP doesn't exist. No wonder they fell into the "expert market."

Thoughts?

 

[Mulligan]

Well....... All this new-to-me activity, and trying to learn about it, hopefully is delaying dementia more effectively than doing a crossword puzzle everyday! Will I ever learn that as a geezer it's time to cut back on anything more complicated than buying some VTI?

Wondering WTF to do with my SLMNP, I spent some time on otcmarkets.com reading about stuff like "expert market," "dark or defunct," "pink current," and "pink limited." Talked to Schwab. Searched the web. Etc.

Schwab told me I could place sell orders online but needed to call in buy orders.

Everything I read and the info from Schwab was congruent with Mulligan's comments (no surprise there).

Sooooo...... What to do now? If I thought LyondellBasell would just continue the divs and would eventually get their act together with reporting requirements and eventually upgrade to "pink current," I'd gladly just hang on to my shares. I didn't press Schwab for info on how difficult it might be to sell them or the potential price. The "investor" section of the LyondellBasell web site had zero mention of SLMNP, only their common shares, so no help there. It's like SLMNP doesn't exist. No wonder they fell into the "expert market."

Thoughts?

Youbet, Im just basically a good parrot! Ok, this is the problem in a nutshell.
A while back I contacted LYB and they said that LYB does not guarantee payment of SLMNP but owns the subsidiary that pays the divi. The divi is probably as close to being as safe as LYB paying, but here is the problem and why the SEC is dragging it down.
The subsidiary that owns SLMNP does not report financials of that company. They are consolidated into all of LYB’s financials.
So SLMNP can never satisfy the SEC filings. Its caught in a circular trap. The only way out is if LYB broke out the individual financials of the subsidiary and or reported them to OTC. Or SEC backed off this regulation. Neither seem to have a direct reason to change course, so its just probably stuck. But..That doesnt effect the obligation and terms of payment.
Its kind of like WTREP is with me or could be soon. My brokerages have zeroed out the value of WTREP.
So it cant go any lower than zero so thats over (for now).
But hey Im an optimist. Im getting close to $1000 every quarter now off a $0.00 investment. That is an incredible return off nothing, ha.

 

[Winemaker]

I'm hanging on to my 15 shares although it's more than I carry in one issue. If the continue to pay the divvy, it's like a 30 year bond, if I live that much longer.

 

[youbet]

Youbet, Im just basically a good parrot! Ok, this is the problem in a nutshell.
A while back I contacted LYB and they said that LYB does not guarantee payment of SLMNP but owns the subsidiary that pays the divi. The divi is probably as close to being as safe as LYB paying, but here is the problem and why the SEC is dragging it down.
The subsidiary that owns SLMNP does not report financials of that company. They are consolidated into all of LYB’s financials.
So SLMNP can never satisfy the SEC filings. Its caught in a circular trap. The only way out is if LYB broke out the individual financials of the subsidiary and or reported them to OTC. Or SEC backed off this regulation. Neither seem to have a direct reason to change course, so its just probably stuck. But..That doesnt effect the obligation and terms of payment.
Its kind of like WTREP is with me or could be soon. My brokerages have zeroed out the value of WTREP.
So it cant go any lower than zero so thats over (for now).
But hey Im an optimist. Im getting close to $1000 every quarter now off a $0.00 investment. That is an incredible return off nothing, ha.

Thanks Mulligan! I didn't understand the exact relationship between Schulman and LYB, but your accounting makes it perfectly clear. It's very interesting that they can incorporate Schulman's financials into the consolidated reporting but keep the ownership of the SLMNP obligation separate. But, so be it. Now I understand. It's a relief! I just couldn't get a handle on why the required reporting couldn't/wouldn't be reported as required by 15c2-11.

It's also interesting that everywhere I look, SLMNP is linked to LYB with no mention of Schulman. Schwab, for example, calls SLMNP an LYB preferred.

Lyondellbasell Advanced Polymers Inc LYONDELLBASELL ADVANCED POLYMERS PRF SLMNP:Over The Counter Market

No wonder the old fella (me) gets cornfused about all this crap!

I'm going to do a bit more reading and research tomorrow and Thursday. If I'm not happy with the ongoing prospects for SLMNP continued div payments, I'll call Schwab and see what they think they can get for my shares. I have 45 below PAR and if I could get PAR, I could just put this behind me and switch my reading to the benefits of feeding squirrels.

Thank you so much for the insight!

 

[youbet]

An additional thought.......

My SLMNP is in my TIRA. If Schwab reported it's value as zero, lowering the total value of the TIRA, I wonder if that would lower my RMD? Yet I'd still be getting a 6% div on the phantom value!

 

[yakers]

I have 5 shares in a tIRA, so far Wells Fargo does not show zero value, just 1,005. But if it goes to zero can I transfer it in kind to a taxable account?
Doesn’t matter much but some day I or heirs will have to do something with it.

 

[youbet]

I have 5 shares in a tIRA, so far Wells Fargo does not show zero value, just 1,005. But if it goes to zero can I transfer it in kind to a taxable account?
Doesn’t matter much but some day I or heirs will have to do something with it.

$1,005 was last Friday's close I think. Schwab shows that figure in several places but today was showing $997 on my positions page for the account where I hold SLMNP. I believe that was the value of an unsolicited bid but it wasn't distinctively labeled as such.

If Wells Fargo does eventually show a zero value on your shares, I doubt they could be transferred to a taxable account without some identified value for tax purposes.

We don't know yet that there aren't going to be buyers for our shares. Shares were selling about PAR last week and the only thing that has changed is that brokers can no longer display bids and asks and shares must be exchanged in the "expert market." Or at least that is what I have concluded so far.

Why not call Wells Fargo and ask about selling yours? I'll do the same with Schwab. We can meet back here and report results.

 

[Sunset]

$1,005 was last Friday's close I think. Schwab shows that figure in several places but today was showing $997 on my positions page for the account where I hold SLMNP. I believe that was the value of an unsolicited bid but it wasn't distinctively labeled as such.

If Wells Fargo does eventually show a zero value on your shares, I doubt they could be transferred to a taxable account without some identified value for tax purposes.

We don't know yet that there aren't going to be buyers for our shares. Shares were selling about PAR last week and the only thing that has changed is that brokers can no longer display bids and asks and shares must be exchanged in the "expert market." Or at least that is what I have concluded so far.

Why not call Wells Fargo and ask about selling yours? I'll do the same with Schwab. We can meet back here and report results.

Seems like a dangerous time, as the public have no idea now of the value, and can be told anything.
Maybe some have put in orders to buy at $5

 

[youbet]

Seems like a dangerous time, as the public have no idea now of the value, and can be told anything.
Maybe some have put in orders to buy at $5

Working with your broker to sell wouldn't involve accepting any ole bid. Especially a $5 bid! But I'm not sure yet how trading works in the "expert market."

I did stumble across this:

https://blog.otcmarkets.com/2021/03/25/understanding-the-expert-market/

 

[Mulligan]

Working with your broker to sell wouldn't involve accepting any ole bid. Especially a $5 bid! But I'm not sure yet how trading works in the "expert market."

I did stumble across this:

https://blog.otcmarkets.com/2021/03/25/understanding-the-expert-market/

Just to be clear. Here is a difference between WTREP and SLMNP in present form. WTREP is not currently tradeable. SLMNP is tradeable but few and limited options. But it will sell some over time. So in theory if SLMNP doesnt trade for a couple months brokerages could value it at $0.00. Then out of the blue it trades at say $1000, then all the sudden the value of the stock would show up in your account. And if it goes stale later it would go to zero…Rinse and repeat…
Now remember one can always tender their shares to LYB and get about $850 a share. This is a standing offer from the conversion feature when A Schulman got acquired.

 

[pb4uski]

PB, I got my WTREP divis in my 3 accounts at TD. So hopefully my other account will pay tomorrow.

I receive mine on 10/4... shows up in Schwab as:

10/04/2021 as of 09/30/2021

Bond Interest

G94787119

WATFORD HOLDIN 8.5% PFDPFD

 

[youbet]

Now remember one can always tender their shares to LYB and get about $850 a share. This is a standing offer from the conversion feature when A Schulman got acquired.

Thanks for that reminder! Having that floor does take some of the edginess out of the situation.

When I talked to Schwab yesterday, they told me SLMNP was trading in the "expert market" at very low volumes around PAR. They also directed me to their more sophisticated trading platform where I might be able to see more than I do on Schwab.com. That's my project for today.

This whole business is yet another very interesting situation which substitutes nicely for doing the daily crossword puzzle!