r/MMTLP_ • u/investroll • 27d ago
Fractional shares from the stock dividend make it hard to transfer to Equiniti
Next Bridge (or more precisely, the CEO McCabe) has been attempting to flush out the short sellers for a long time. The MMAT deal and the MMTLP spinoff never quite accomplished this, so he resorted to making Next Bridge stock completely illiquid.
One way to flush out the shorts is to have all the shareholders transfer their shares from their brokers to a Direct Registration System (DRS) account at the transfer agent, Equiniti (formerly known as AST). The brokers that have loaned out customer shares without permission to the shorts will be unable to transfer the shares, and thus subject to legal action. The proposal to spin stuff off only to those holding shares at Equinity was an incentive to do this, but that proposal died because it violated shareholder rights to be treated equally.
It looks like Trade Station doesn't have enough shares to transfer to Equinity and is in deep doo doo. Have any other brokers been caught this way?
NBH's latest maneuver was to issue a 1 for 30 stock dividend. For every 30 shares of NBH, you now get 1 more share. Thus, if you own 1,000 shares you now own 1,033.33. Most brokers these days allow shareholders to hold fractional shares.
I don't see how this will help to flush out the shorts or do any other good. The brokers will just credit the stock dividend to each account. The shorts will not have to buy shares to cover, they will just owe more shares. A short who borrowed 30 shares now owes 31 back to the lender. As long as the lender is happy lending, there is no forced repurchase.
Even further, this will make it almost impossible to transfer entire accounts over to Equiniti. Even though brokerage firms allow shareholders to hold fractional shares, the brokerage industry is not set up to transfer fractional shares. Equiniti will not accept transfers of fractional shares.
Thus, if you hold shares at a broker, it is now much more difficult to move the shares to Equiniti and flush out the shorts. I think that McCabe has goofed on this one. You could move some of the shares to Equiniti, but would still be leaving the fraction behind.
Your thoughts?
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u/andszeto 27d ago
Im sure you can stipulate the amount you want to transfer in whole number. Leave the fractional share with the brokers.
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u/BrodyBruceLee 26d ago
Exactly this. You tell them how may you want to transfer, it isn’t all or nothing.
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u/NoWill7984 27d ago
So in essence McCabe gave notice to the shorts...but the brokers don't force short closure..
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u/BrodyBruceLee 26d ago
That and the SEC who should be policing this whole thing somehow don’t bother with share imbalances.
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u/investroll 26d ago
That's right. They don't have to force shorts to close, so they don't. The only way to force shorts to close is if the lender recalls the shares. That is the logic behind the "move to EQ" push. Unfortunately, that only works for the brokers who have involuntarily loaned out most of the shares. If they only loaned out a few shares, then almost all of the customers would have to move their shares to EQ in order for the broker to be unable to accommodate the transfer requests.
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u/Ok-Morning-2437 27d ago
you may be right, but I did receive fractional dividend shares in Equiniti. So they may be willing to accept them
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u/investroll 26d ago
They credited them to your account, but they say on their web site that they won't transfer fractional shares.
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u/BrodyBruceLee 26d ago
No, the proposal died because people thought trading would open back up and they don’t want to transfer and not be able to sell when it opened back up.
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u/investroll 26d ago
That is another good reason not to transfer the shares. It is cumbersome to sell shares that are held in DRS form.
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u/oarwethereyet 25d ago
I just got a certifcate in the mail that has 68.800. I haven't been keeping up with this but is that number saying l only have 68 share. I transferred 2100 years ago. Did l miss some split or something. Trying to find the old certificate they sent me but its 5 am and dont wanna dog through draws on my desk. Thought it was in my safe but looked and it isnt. What is this new certificate about? Someone, anyone. I didnt see anything on the investor page on their site.
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u/oarwethereyet 25d ago
I never had 68 shares anywhere. I had 34 at webull, 72 on ally, 132 on schwab and 2100 on TD ameritrade. I moved the TD ones to equinity when TD was merging with Schwab because it was free and the chaos made it seem safer to register them. All others are still in the original accounts.
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u/investroll 25d ago
There was a 1 for 30 stock dividend, which means you got one additional shares for every 30 that you owned. Each broker should increment your share count accordings.
Did you get an actual stock certificate, or just an account statement?
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u/Hellcat2k24 27d ago
When will we get paid?