01.Unsolicited share offers
NIB has issued a warning to its shareholders about an offer they may receive from Hassle Free Shares. See NIB shareholder alert for details.
Several companies including Direct Share Purchasing Corporation (DSPC) and Hassle Free Shares get investors' names, addresses and shareholding details from company registers. They then make offers to buy their shares for well below their market value (details below). Several of the big companies whose shareholders have been contacted, as well as the NSW Fair Trading Minister, have issued shareholder notices or warnings about such offers.
In July 2009, Kylee was offered less than half the market value of her NIB shares by Hassle Free Shares.
"I just wanted to let you know that I received an offer today from Hassle Free Shares Sales for NIB Shares. The offer was made for $880.00 even though on the second page they go on to say that the true value of the shares is $1790.00. I was really angry to receive this offer as I did not give anyone permission to give my details to this company and feel that consumers need to be warned that these people are out there."
Please note: this information was current as of August 2009 but is still a useful guide to today's market.
These offers, while poor value for shareholders, aren't illegal. However, David Tweed, the man behind DSPC, has a history of making below-value off-market share offers, and several of his companies have been the subject of Australian Securities and Investments Commission actions.
In one particular case, ASIC alleged that an unsolicited offer to Aevum shareholders by National Exchange, another of David Tweed's companies, was misleading or deceptive, and that the company had engaged in unconscionable conduct. The Federal Court rejected these allegations and found that the offer didn't contravene the relevant law.ASIC's appeal to the Full Federal Court was not upheld, but the Court commented that "the conduct can properly be described as predatory and against good conscience" and "designed to take advantage of inexperienced offerees".
Mr Tweed disagrees with these views. He says he provides a convenient way to sell shares; you simply sign a form and receive a cheque within three business days of acceptance.
Steer well clear of such poor-value offers. Don't sell yourself short by offloading your investment for less than it's worth.
Don't be pressured into doing anything. You don't have to sell.
- If you want to sell listed shares, contact a licensed stockbroker (online trades cost as little as $20 to $30). That way you'll get the market price, instead of losing 40% or more.
The federal government wants to protect consumers from predators who access details of shareholders in publicly listed conmpanies and then offer to buy their shares at below market value. Details at the Treasury site.
Have you received an unsolicited offer for your shares?
If you're offered less than market-value for your shares, we'd like hear from you. Have your say on the comments tab, above.