How to liquidate small amounts of common stock cheaply?

October 5, 2005 1:08 PM

Common stock cheepnis - I have several small amounts of common stock, what is the most cost effective way of liquidating them?

About 15 years ago, I bought single shares in a number of different companies, in order to get into their DRIP programs. Several of these companies did not allow me to deposit these certificate shares into their DRIP, and after splits, divestitures, etc, I am left with less than 10 certificate shares each of three different companies. What to do?

posted by ackptui to work & money (6 comments total)

Do you have the paper certificates, or is the stock with a broker?

If you have the certificates, you could find someone who owns larger quantities of the stock, and sell your share(s) to them. They could then send the share(s) to their brokerage company, combining them with the rest of their holdings. This way you avoid a brokerage fee.

Of course, it depends on your ability to find another shareholder who wants to go through this hassle.
posted by alms at 4:09 PM on October 5, 2005

If you're not really hard-up for the scratch, I'd suggest giving them to a larger church or charity-- these organizations receive many such donations and can make bigger lots out of your tiny certs.
posted by Kwantsar at 6:16 PM on October 5, 2005

I wait until a larger company acquires them and sends me a check, so I don't have to pay any broker fees.
posted by brujita at 9:16 PM on October 5, 2005

You can fund an Ameritrade account with stock certificates. Or if you already have an account, you can deposit one. Ameritrade is very up-front about disclosing any transaction fees, and I don't see any mentioned, so it may be free. Fewer shares are probably cheaper since they require less human effort to process.

Full disclosure: I've been an Ameritrade customer since it was Datek and they gave you a few percent interest for your cash balance.
posted by b1tr0t at 9:35 PM on October 5, 2005

Oops, looks like that third link is just for us ambiguously selected, secret elite members of Ameritrade. They would kick me out if I told you what it actually says, but I might hint that it isn't very different from the "stock certificates" link.
posted by b1tr0t at 9:39 PM on October 5, 2005

I have some very small (value, number) shareholdings and recently enquired with my broker, TD Waterhouse about the cost of disposing of them. They said that all odd-lot transactions go off for the standard commission (which is, I think, $17.95). If the proceeds from the transaction would be negative, they reduce the commission until the proceeds are $0.01 net to you. I have at least one case where this applies.

I know it may not seem particularly 'cost-effective' to wind up with a penny after you sell ten shares. I haven't done this yet, but will before the end of the year. The point for me is to realise capital losses as capital gain offset. In that case, I consider selling at a loss cost-effective because it's saving me tax on the other side. The commission counts as part of the loss, and I'm sitting on big cost-basis losses on these holdings, which were spin-offs from an earlier share meltdown. Plus it tidies up my portfolio.
posted by sagwalla at 1:33 AM on October 6, 2005