Main > Everything Else
Scottrade sold or Citigroup bought my shares of stock...without my knowledge?
hypernova:
I'm not a big stock trader. I've only ever done two transactions. I bought Sirius stock when I found out they were signing Howard Stern. I hate the guy, but thought it would be a big stock mover for them. It was, then dropped over time. I've lost money in that one, but no big deal. Have the 230 shares I initially bought.
Now later, I still had some money left in the account to use on a stock. I decided to buy some bank stock after the banks nearly collapsed. I bought Citigroup (symbol C). I only bought 10 shares, but it was only about $3 a share at the time. Realized the purchase was a little over what I actually had left in the account, and sold 4 in order to keep my account in the black and not have to put in more money. So I had six shares left. I've checked on occasion every half year or so.
I just checked, and my Citigroup shares are GONE! My account was compensated $24.xx for the transaction back in May. To add insult to injury, their stock value is at $24.63 today. So I got maybe $4 a share. I just sent an email asking what the hell happened, and why were my shares sold without my permission. It's only $125, but still, it pisses me off...and it is $125.
Any ideas why this happened?
Edit:
That was fast. Got a response.
Citigroup did a 1 for 10 reverse split. Since I only had 6, Scottrade doesn't do fractional shares. Thus the money back in the account. In addition, I guess the reverse split was the reason the stock is up to $25. So it's value didn't actually increase about 7x. Rather, it is less.
SNAAKE:
:dizzy:
< not smart enough to buy/sell stocks :dunno
SavannahLion:
I had to look it up. I've heard of merges, but never reverse splits. Looks like they're the same thing.
Apparently they're done when the company (among other things) is in some sort of financial trouble and is in danger of being delisted from the stock exchange. Not a good thing really. I suppose it's the money mongers way of "cooking the books"?
Given that the banks recently announced that they're tacking on a bunch of debit account fees for using your ATM, I wouldn't doubt there's going to be more cash lost as people (myself included, I've already bailed from Wells Fargo) flock to the Credit Unions. It's a ---smurfette--- to get loans and the like from them, but C.U.'s don't hide a lot of charges and dink you whenever they find new ways to make money.
MonMotha:
Splits and merges don't really alter the valuation or equity distribution in a company; they're basically a way to keep the per-share price in a reasonable range. Whether you own 20 shares at $10 or 2 shares at $100 doesn't really matter much except that it's hard to trade less than a single share, so it's handy to keep the per-share to a reasonable level so that your stock is more easily traded, and most exchanges also won't list you at all if your per-share is less than $1, so that puts a firm bound on the bottom for such issues.
Then you have weird stuff like Google and Apple who seem to see little problem with outrageous per-share prices. Probably has to do with the fact that it's generally easier to trade fractional shares on the NASDAQ than NYSE and direct tech investors generally have a larger appetite, anyway (most small dollar retail investors would probably be hitting up ETFs or mutual funds these days). There's also supposedly some "prestige" in a high per-share price.
There's some other subtleties involved, but that's the basic gist of it. Citigroup was flirting with the "less than $1 per share" thing. While NYSE gives you a while to get your act together, it can scare investors to hear about it, so there was a preemptive reverse split.
Hoopz:
Stock exchanges don't trade fractional shares. When your shares are held in "street name" (with a brokerage firm) as opposed to someone actually having a certificate in their possession, the brokerage firm handles all fractional shares for all of their clients for that particular security. Fractional shares usually occur when a client decides to reinvest their dividends. The brokerage firm has X number of total shares, they receive a dividend and they need to buy more shares. Whole shares are purchased from the exchange and are divided proportionally between all of the clients. The fractional amount that is left is held in the broker's house account.
If you think Apple and Google's price is high, check out Buffett's company Berkshire Hathaway (Class A). Ticker is BRKA. It's at $108,100 per share. Good old Warren doesn't believe in stock splits.
Navigation
[0] Message Index
[#] Next page
Go to full version