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Smith & Wesson Holding Corporation Message Board

  • dontbetheball dontbetheball Jun 21, 2013 3:40 PM Flag

    Fidelity Tender offer details

    The fee for tendering shares is $38, regardless of how many are accepted. You can place a conditional offer to tender, example would be "at least 300 of my 500 shares would be repurchased. But any conditional offers only take effect of the pro rata tender falls short of 7.5mm shares.

    Personally, I am buying more. I know two cops and they love the M&P, as does my gun store guy.

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    • I have not gotten anything from tdameritrade yet. 10 dollars is break even for me, I was hoping that we were going to 11 or 12 after earnings. Is this a wet dream that now wont happen?
      With being so close to 10 this does not sound likea good deal at all, so why would people take it.
      The last couple of times we got beat down we shot up the next trading day.
      Any opinions on going to 11 or12 or higher especially when a low PT is 12 a mid pt is 15-16 and I saw 18 as a high pt awhile back. Not to mention S&W getting alot of buy articles.
      opinions please

      Sentiment: Strong Buy

    • let's say it's trading 30 cents below tender on the closing date.
      1. Your 500 shares will only allow you to tender about 60 shares, not 300 if they are subscribed to max or oversubscribed.
      In that case you would lose $20 on the trade (60sh x .30 = $18 - $38 = -$20).
      If somehow you get 300 out of 500 Tendered (not!) your best case would be a profit of $52 and your shares locked during their acceptance.
      Again, this tender is not for the retail schmuck and your shares prove this point with amazing clarity.
      Besides, I elieve the captain is right.....FIFO may apply here if I remember reading the SEC filings correctly. You may wish to research them yourself and post what tou find. They have 7 articles if I remember correctly under which the tender is explained (articles as in I, II,.....IV....VII.)

      p.s. Why do you use Fidelity for your trades? Their prices have always been outrageous compared to other brokers.

      • 1 Reply to datbehardwork
      • Breakeven is about 102 shares tendered, with a Fidelity buy comm. of $7.95 (actually a bit less because the buy comm. should be pro-rated vs the total shares bought), assuming you get charged a $38 fee to tender (which most brokerages will not charge active traders). So 102 x 8 = 816 shares for breakeven tender with oversubscribed condition.

        If someone bought 500 shares at 9.65 with a 7.95 comm. and they offer them all for tender and only 1/8 get accepted, due to oversubscribed condition, and they are an active trader for which their brokerage charges no tender fee, they will make at least $20.88 profit. Not much, but not negative ! The $0 profit shares total tendered would be about 23 shares tendered, with only 1/8 accepted. Anything over that and you make a profit, no matter how small or big. What will happen with the rest of your shares is another story and remains to be seen.

    • If you are an active trader, most brokerages will not charge any fee at all.

    • We have until July 12 to respond. I see no advantage to responding early. Does anyone?

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