Does SelfWealth impose any restrictions on stocks such as GameStop (GME)?
In short, no.
SelfWealth members have been allowed to buy and sell GME as well as others like AMC, throughout the entirety of 2021. This is in stark comparison to other platforms that entirely halted the trading of certain stocks.
There is one limitation in place though, which is a unit price limitation on orders. Currently, this sits at $3,000 per share. At the writing of this article, GME is priced at $150. Therefore, the limit is far from any existing selling point.
You can see the full statement from Phillip Capital Limited (PCL) (the partner that enables US trading via SelfWealth) regarding GME queries below:
The recent price action and volatility due to a short squeeze in the stock of GameStop Corp (GME – NYSE) has resulted in some investors expecting a continuing rise in price to levels that are unrealistic. These high-priced sell limit orders can result in stressing contra party risk limits that monitor order values and could result in executing venues to start rejecting all orders if these limits are not closely monitored and efficiently managed. A Limit Order price restriction on GME has therefore been implemented (current Limit Order price restriction 3000) to curb orders being placed excessively far from the current stock trading price to maintain the health of the system. The price limit is not designed to stop trades being executed in GME and our counterparty has thus far remained open for trade throughout recent volatility allowing buy and sell orders to be executed. This is in contrast to other providers which halted trade completely. The counterparty is well aware of the heightened volatility in GME and other similar stocks which have the potential to go parabolic and therefore monitor the Limit Order price restriction intraday. In the event that GME began to rise rapidly the Limit Order price restriction would be raised in real-time to ensure that any order, that may be executable at some point, be allowed onto the counterparty books. The counterparty reserves the right to update its policy at any time to maintain the health of the system.
What’s happening with my GameStop (GME) shares regarding the proposed stock split (stock dividend)?
Per the official company announcement on April 12, 2022, GME announced a proposal to approve an amendment of their current share allotment. The purpose of this is to facilitate a potential stock split in the form of a “stock dividend”. The company is announcing it as a stock dividend, but for general Australian investors of traditional stocks this is more commonly referred to as a typical stock split. That is, the split will result in a unit allocation and not a payment of a cash dividend.
The proposal includes that the total number of shares that Gamestop is authorised to issue would be increased from 300 million Class A shares to 1 billion Class A shares. Class A shares are the typical shares that are traded on the Stock Exchange.
If the proposal goes through, this means the potential stock split might be conducted on a 3 to 10 basis (not confirmed). As an example, this means that for every 3 shares you hold in GME, you would receive 10 shares as part of the stock split. This would also mean that the price at the time of the stock split would be decreased by a ratio of 10 to 3.
To be clear, if you held 200 GME shares with the current stock price at $150.00 per share, you would then hold 666.67 shares which is rounded down to 666, and the current stock price would be reduced to $45.00 per share. A reminder that SelfWealth does not deal in fractional share trading.
It’s important to note that the stock split is still in proposal stage and is still subject to being passed, pending the amendment being passed at the annual meeting in June. At this time the company has not officially confirmed the split ratio of the potential stock split. If the amendment passes it will occur on the date that the certificate of amendment is filed with the Secretary of State of the State of Delaware.
The above is general advice and information based on the company announcement on April 12, 2022. Please note that this is subject to change based on what could be stipulated by the company. Although we endeavour to ensure the accuracy of all information we provide, we do not accept any responsibility or liability for any errors.
Am I going to receive my stock in a cash dividend?
No, you won’t. The company is announcing it as a stock dividend, but for general Australian investors of traditional stocks this is more commonly referred to as a typical stock split. That is, the split will result in a unit allocation and not a payment of a cash dividend.
Do I need to pay any fees for my stock to be split?
There are no fees regarding the stock split from SelfWealth or PCL.
Would my average price on my holdings automatically update in my portfolio?
Whilst the current stock price will reflect accurately on your My Portfolio page, the average purchase price when you purchased the stock will need to be updated by you.
You can learn more about how to do this in the below article:
Can I vote in the upcoming annual meeting?
No, not at this time. The current solution provided by SelfWealth's US trading partner and the capabilities of the SelfWealth platform do not cater for client voting at EGMs and AGMs. PCL (as Custodian) holds shares on your behalf with the appointed sub-custodian and they retain voting rights or your stock. The control number is retained by Phillip Securities Pte Ltd (Sub Custodian). It is PCL and its sub-custodian’s policy that they do not take up voting rights unless instructed by the beneficial owner. Therefore any voting rights will lapse unused.
Can SelfWealth Direct Register (DRS) my GME shares with ComputerShare?
Our US Trading Partner PCL does not offer the service to DRS your US shares to ComputerShare. If you wish to DRS your shares, you will need to fill out a US Stock Transfer out form and transfer your stock to another broker that can complete the DRS Transfer. There is a fee of $110 AUD per line of stock that PCL charges for this service, which will be debited from your SelfWealth AUD Cash Account.