Nwlean was exactly right about Scottrade.......they will only turn in a request for 100% cash dividend when, as in this case, cash or stock requests are allowed. It has been suggested that each of us Scottrade customers call Scottrade about this very serious shortcoming of theirs:
Scottrade 1-800-888-1980 x 1900 Mr. Randy C.
I am definely calling first thing this morning, AND I REQUEST THAT ALL OF US SCOTTRADE CUSTOMERS MAKE THIS CALL IMMEDIATELY!
Let's use this topic strickly for factual, constructive information about Scottrade customers getting around this problem.
Here is what is going to happen at Scottrade:
Scottrade will tell the transfer agent that they want CASH for all of their stock (which they hold in various quantities for various customers like you and me). It won't matter what YOU or I want because Scottrade has decided that CASH will be requested for everyone..........period. Now we all know that there is only $2.3M in cash that can be distributed so, depending upon the final total requests for cash versus the total requests for stock, we (unfortunate) Scottrade customers will get an unknown amount of cash and the balance in stock. I don't believe there will be any problem with Scottrade properly distributing the cash and the stock. The PROBLEM is that Scottrade refuses to ask for cash or stock per their customers' individual requests, but will simply ask for cash for everyone......very unsophisticated, and inflexible, of them!!!!
Just called Scottrade this afternoon (Tue.) and the guy said all dividends would be added stock shares. He said I could always sell them if I wanted to. Guess we'll find out Jan. 30, but I can't understand why there's so much contradictory info.
Luckily I have an Ameritrade account and have already requested the DRIP option a few years back. All my dividend will be re-invested in stock automatically and I won't have all these Scottrade worries.
Good luck to all and hope for a bounce not a dip.
Thanks for the info, but this leads to my next question. I asked the guy at Schwab about that option and he said I will still receive cash in the account and THEY will reinvest, ie: buy back shares for me at the prevailing price, which is clearly not the same as receiving shares directl;y from JRT, Am I misinterpreting this?
For all of you out there that don't know what your broker is going to do to/for you I recommend you call The Altman Group. This is the company's information agent @800-870-0126.
I already called my broker Bank of America and they are doing exactly what I want. ie 9 cents/share cash if the company authorizes it and 79 cents in equivalent stock. All is well.
... That is what I have requested from my broker at Wachovia (3 times) and he is still looking in to it. I wanted the .09 cents in cash and the remaining .79 in stock. My concern is are we, the investor supposed to complete the election form or does the broker do this?
A fellow at Scottrade's Compliance Dept. just told me the same story.....it's cash and that's that. He was well aware of this particular situation, and he "said" that they were working on it (not sure I believe him though). Well, my last hope is the SEC getting back to me. I will keep this board informed under this topic.
I received a letter from Schwab indicating that, since my account does not stipulate a reinvestment option for dividends from JRT, they will automatically default to the cash option.
This sounds appropriate to me, and I bet JRT is counting on this catch-22 to insure that too many people request cash. The result should be mostly stock and a few cents in cash.
Not a problem IMO.
ikapetti - JER doesn't really care what the requests are. Unless there are lots of request for stock alone, they will pay out a max of .09/shr in cash (per their announcement). So it really won't matter to them either way.
Schwab can request all cash, but they'll get a stock/cash combo, mostly stock. If they sell, even more shares will flood the market, crashing the stock. Be prepared, brothers, by setting some progressive buys from .90 to .40. If they never hit, no harm done. If the stock dives, you'll be glad you did.
I think you are correct in thinking that if enough people request cash, then there will not be enough to go around and so we will all get mostly stock. I hope this comes true. My problem is that, in following Nwlean's suggestion to buy stock with the amount of cash that I will get, I really won't know how much stock to buy because I won't know how much cash I am going to get. Still, at about $1 per share, I guess I can afford to buy enough to cover me.........enough to avoid percentage ownership dilution.
I just file the following complaint with the SEC using their website:
<JER Investors Trust (JRT) is offering a cash-or-stock dividend to its shareholders per an IRS Revenue Procedure released Dec. 10, 2008. Each stockholder of record date of Dec. 30, 2008, can request that the dividend be paid in cash or in stock. This request must reach the transfer agent by 5:00 P.M. EST on January 22, 2009.
My 2500 shares of JRT is held in street name by Scottrade, and Scottrade has said that they will request 100% cash for my shares and the shares of all of their customers regardless of what their customers individually want. They said that this is because their computer system is incapable of processing mixed requests (some customers wanting cash and others wanting stock) and so they have decided that all such selections will be processed as a request for 100% cash. This particular dividend is unusual mainly because the amount stock to be issued is so large -- about an additional 80% stock for the currently outstanding 100%. So, in this case, it is very important that a customer's desire for stock instead of cash (which is my desire) be carried out or the customer's shareholdings will be seriously diluted.
Although I am a satified Scottrade customer, at this point I really do not know what to do to avoid having my shareholdings being seriously diluted, so I am requesting your QUICK INTERVENTION.
JER Investors Trust website is:
Scottrade's website is:
Thank you, >
I ENCOURAGE ALL OF YOU FELLOW CUSTOMERS TO FILE A SIMILAR COMPLAINT .......IMMEDIATELY!
I just sent the following e-mail to JER Investors Trust using their website address for contacting Investor Relations:
<Dear Mr. McGillis,
A very serious situation has just come to my attention. I am a customer of Scottrade and they hold my 2500 shares of JER Investors Trust (JRT) in their street name. I want to request 100% STOCK for the upcoming dividend, but Scottrade has told me and others that their computer system is incapable of handling optional requests for stock or cash, and so THEY WILL REQUEST 100% CASH FOR ALL THEIR CUSTOMERS. And this may be the case at other brokerage houses as well.
Many of us JRT investors communicate on the Yahoo Finance Bulletin Board for JRT and we are all quite concerned about this. The following contact information was posted on this bulletin board about this situation.
Scottrade Compliance Department
1-800-888-1980 x 1900 Mr. Randy C.
Is is possible for you to look into this situation IMMEDIATELY and contact Scottrade to see if there is some way to overcome this shortcoming of theirs which, uncorrected, will cause serious harm to to some of your shareholders who want the stock and not the cash (which I believe is what JRT would want also)?
Thank you for your help,>
I will post any information I receive as a result of this e-mail.
Here is the responce I received back from JER:
<Thank you for your interest in JER Investors Trust. In response to your email regarding your Scottrade account, please note that JRT does not have a contractual relationship with Scottrade. You will need to directly contact your representative at Scottrade to discuss this issue.>
Thanks guys. We've finally got some constructive conversation on this topic.
Just in case this thing gets screwed up by Scottrade, I suggest we hedge our bets by placing buy orders at the grant price (we'll know what that is by 1/27) for the shares we should be granted. The risk seems relatively low, since if Scottrade dumps a significant amount of stock, the shares should plunge in the short term. But I suspect they will rebound after 1/30, so either way, this hedging protects us.
(I may be using the term 'hedging' incorrectly, but I think those who matter will understand).