The New York Times: “That Letter Offering to Buy Your Stock? Think Twice”
April 15, 2022, The New York Times — Marguerita Cheng, CFP® Pro, is featured in today’s New York Times article entitled, “That Letter Offering to Buy Your Stock? Think Twice.”
writes: “Early this year, I opened my mail to find an intriguing offer: A company wanted to buy stock that I held. I noted the proposal — $14.40 per share in cash — and searched online for the current price, which was almost $20. Reading further, I saw that the offering document disclosed that the price was about 27 percent less than the stock’s market price. Why would anyone sell shares at a discount?”
Welcome to the strange world of “mini-tender” offers, she explains, and asks Marguerita: “What should I do if I get a mini-tender offer?”
Marguerita Cheng, a certified financial planner in Washington and an “ambassador” for the Certified Financial Planner Board of Standards, recommends comparing the current market price with the price in the offer and consulting a trusted adviser before taking action.
“I have never advised clients to take advantage of a mini-tender offer,” she said. “They are generally not the best deal for investors.”
Always check alternatives for selling your securities, the S.E.C. advises. Compare the mini-tender offer with how much you would receive if you sold through a broker.