The Boss' Blog - Stock Transfer Information & News

Australia

2009-05-08T10:43:00.000-07:00

Are Australians taking over the world? I was once on a trip to Alaska and I met a kind of burly, “hail-fellow-well-met” guy, and he made, what I thought at the time (this was around 2001), a very strange comment. Certainly off-the wall.

He said to me “The world is entirely run by 25 incredibly wealthy men in Australia”. Aside from the fact that what we were discussing was in no way related to who was running the world, I was taken aback by the concept itself. Why were they congregating in Australia? And how were they running the world, anyway? Were they a secret organization like James Bond’s SMERSH or SD-6 from ALIAS?

Now, you are probably wondering what in the world this has to do with transfer agents. Here’s what; the largest and the 3rd largest of the U.S.’s stock transfer agents (rumored to soon become the second largest) are owned, not by Americans, but by Australian companies! So, maybe the guy I met in Alaska was right?

Anyway, in case you were wondering, StockTrans is still 100% American owned and operated, and will remain that way! But, if you want to know something really strange, a while back I got a call from someone claiming to represent a THIRD Australian company (an “investment company”) that wanted to purchase a stock transfer agency and wanted to know whether StockTrans was for sale. I, of course, said no--but, Jeez! I mean, I like Crocodile Dundee and shrimp on the barbie as much as the next guy, but, really…what IS going on in Australia?

Off The Wall

2009-04-08T13:30:00.001-07:00

Can someone explain to me why AIG and Citibank and all the other banks are getting zillions of dollars while the American car companies have to crawl on their knees to get a few billion (I know, two years ago we would say a billion dollars was a lot of money, but those days are gone…). I mean, at least the car companies actually make something! And they employ people who have skills!

Instead of pushing the car companies into bankruptcy, why not let AIG and Citibank and all the people who played around with credit default swaps and mortgage backed securities go bankrupt? And don’t tell me we need them to survive! We have a lot of regional and small banks as clients who are doing just fine and lending on a regular and fair basis to individuals and businesses. And since no one is going public now any way and very few mega-deals are being done, who is going to miss the giant investment banks anyway? We survived Bear Stearns and Lehman Brothers going under, and I am sure new ones will crop up when they are needed.

I think we should reward the people who have been conservative and ran intelligent risk-analysis systems and let the idiots who got in way over their heads get what they deserve. So go out and do what I did—buy a new American made car and support your country (I bought a Buick Enclave and I think it is a great car)! And, by the way, yes, StockTrans is American owned and managed and is quite solid financially.

StockTrans Comments on Recent Financial Turmoil and its Impact on Transfer Agents

2008-10-31T05:06:00.000-07:00

ARDMORE, Pa., Oct 30, 2008 (BUSINESS WIRE) -- Over the past two months, StockTrans has received numerous inquiries about the impact of the recent turmoil in the financial services industry on transfer agents. Today, StockTrans issued a statement providing commentary and perspective on the issues that transfer agents face in this new economic reality.

Jonathan Miller, President and CEO of StockTrans, said, "First and foremost, because of financial difficulties faced by bank-owned transfer agents, there is likely to be significant disruption to many public companies due to the forced mergers and acquisitions of, or worse, the exiting from the business by their transfer agents. As these transactions are consummated, there is likely to be considerable disorder for companies that use bank or financial institution transfer agents because of data system mismatches, personnel layoffs and changes, and, perhaps, the acquiring banks terminating the stock transfer business of the acquired banks."

Miller continued, "In addition, as financial resources are reallocated within banks, there is likely to be diversion of capital spending and customer service resources away from the transfer agent division of their business. This, we believe, will cause further deterioration in customer satisfaction for shareholders of clients of bank-owned transfer agencies."

Miller concluded, "From our standpoint, the fact that StockTrans is an independent, well-capitalized, privately-owned professional transfer agency leads to stability for our clients and their security holders, and presents a growth opportunity for us in this difficult economic period. We are profitable, debt free, and remain committed, as we have for almost 40 years, to stock transfer as our only business, providing service for over 350 clients' issues."

About StockTrans:

StockTrans is an industry leading stock transfer agent and stock benefit plan service provider, helping small and mid-cap companies around the world with their stock transfer and plan administration needs. For more than 37 years, StockTrans has stood out in the stock transfer industry with its unmatched customer service, experienced staff, affordable services and use of the latest technology. For more information, please visit www.stocktrans.com.

Is there a logical balance point between service and price? (Part Three)

2008-10-06T13:15:00.000-07:00

Quite a difference in the financial environment since I last posted here (sorry for the delay). During this time, the dangers of having a giant bank or financial services company act as your stock transfer agent, provide your corporate action services, pay your dividends, manage your ESPP’s, act as exchange agent, etc., etc., etc., have become self-evident. Those giant transfer agents have plenty of other things to worry about besides your shareholders (like staying in business, etc.). As a matter of fact, with CDO’s, sub-prime mortgages, credit default swaps going down the tubes, the LAST thing they are concerned about is your company’s stock transfer needs.

Guess what! StockTrans has no investments in CDO’s, sub-prime mortgages or anything like them! We are, as we have been for almost 40 years, totally independent, totally solvent and totally dedicated to stock transfer and stock benefit plan administration alone. Now is really not the time for you to have to worry about the security of your shareholder data. As you are probably aware, one transfer agent has reportedly lost the personal identifying information of as many as twelve-and-half million shareholder accounts! Other agents have outsourced their customer service operations to foreign countries. Is that where you want your shareholder information to be under the current economic conditions? Knowing that foreign markets are in at least as bad shape, if not worse, than ours? Don’t forget, your shareholder’s personal information is worth money to criminals! Do you want to take the risk that someone that you do not know, who is in some country thousands of miles away, operating under stock transfer security procedures unknown to you, has access to your shareholders’ accounts?

At StockTrans, we have multiple layers of data security and personnel security to insure that your shareholder information is never released to anyone except authorized parties. All our transfer agent and stock plan administration personnel are here in the good ole U.S.A. Is your stock transfer agent in the financial condition that it can even focus on your business? Think about it, and feel free to call me to discuss any of these matters.

Is there a logical balance point between service and price? (Part Two)

2008-08-04T05:16:00.000-07:00

So, you want to know if this is just another story that’s going to end in “You get what you pay for…” Well, it’s not.

On the low end of the scale of transfer agent pricing, you can certainly save money in the short run. But the longer you stay with the really low-priced transfer agent, the greater chance something will get screwed up, the longer you will go without leading-edge technology, and the longer you and your shareholders will suffer from bad service. Just last week an issuer called us and said, “I can’t reach my current transfer agent half the time! He loses papers all the time! I would like to get a new agent! Can you please help me?”

And now, with the stock exchanges mandating issues to be DRS eligible with DTC (Depository Trust Company), at least some of the low price agents will not meet DTC eligibility, and therefore, cannot provide you with the required DRS eligibility. And what about insurance and fiscal stability? Do you know how secure your data really is? Are you protected if one of these low-priced agents makes a mistake, or worse?

Of course, you can find a really cheap transfer agent-you can find a really cheap anything!
But no, I’m not going to say “You get what you pay for”, because when you go for the lowest-cost provider, you are not going to get what you pay for –you will get either less than you pay for, i.e., no service, no insurance, etc., or more than you paid for, i.e., trouble!

Next post I’ll tell you why you also don’t get what you pay for if you go with the highest-priced spread!

IS THERE A LOGICAL BALANCE POINT BETWEEN SERVICE AND PRICE???

2008-07-18T05:02:00.000-07:00

First--The Shape of the Stock Transfer Industry Today:

The U.S. stock transfer agent industry, in terms of size of agents, has evolved into a Hershey’s Kiss® shaped array. There are many (hundreds) of small transfer agents, often mom-and pop operations, with very little overhead. They may operate out of their homes, or carry little or no insurance, or have no employees, offer very limited service, or not be DTC eligible, etc. Because of these restrictions, some of them charge very little.

Then there are about ten mid-sized agents that offer full transfer agent services, and even fewer mid-sized agents, like StockTrans, that are technologically equal to any large transfer agent. (Forgive me for adding, in a pat to our own back, that StockTrans is one of the very few stock transfer companies of any size that also offers full stock benefit plan administration and self-administration software, both with broker-neutral online exercising capability for plan participants).

Then there are five or six mega-agents, with clients in excess of 500 all the way up to 3,000 or more. (In case you didn’t know, by the way, two of these mega-agents are actually owned by foreign companies).

Anyway, do you get the Hershey’s Kiss® picture? That is the shape of things in our industry.
So-- what do you get on the cost vs. service scale of this odd breakdown of stock transfer agents? Not always what you would expect! I promise I’ll tell you exactly what you should expect in my next post. And maybe even a recommendation of which transfer agent you should use…

Dubious Contests Awards vs. Who’s Number One?

2008-06-02T07:36:00.000-07:00

If you look at a number of stock transfer agents’ websites or advertising material, you will find a blurb about how they won this “stock transfer” award, or came in first in that survey of stock transfer agents’ clients, or “placed” in the top five of some other beauty contest. And some of you might wonder why you don’t see something like that on our site. Well, there are several reasons.

First, the way that most of these “impartial” surveys work is that you have to pay a “consulting fee” to the survey takers, or the prize sponsors to be in the “survey” or to be in contention for the “award”. Now think about it; how impartial or comprehensive can such a contest be, if the only transfer agents who are “entered” are the ones who are willing to buy their way in? Obviously, that leaves out a lot of other agents who refuse to participate in that kind of nonsense. And if you look at the dates of some of these contests and awards, you will see that they are from several years ago, because even those transfer agents have decided to stop participating in these charades.

Second, (that was a long “first” wasn’t it?) the rankings are often preordained by the way the various surveys are conducted. For instance, the larger agents can just submit the names of the clients they know will give them a great reference, ignoring the clients they have messed up, and the smaller agents often only submit one or two clients who, for all you know, they may be related to. I mean, what does it prove if one client ranks you at the top of every category? And of course, you are not told by the transfer agent when they post their “Award” how many clients actually responded!

So, what about StockTrans? Well, we think the best way to rank an agent is by the loyalty of their clients. StockTrans is still proud to say we have never lost a client due to service dissatisfaction! We have lost clients who have been bought, gone out of business, or who, because of financial difficulties, have been willing to give up service for a lowball provider (although these often come back to us when they are in better financial shape). We even once lost a client that thought we weren’t “big” enough to handle them, much to their subsequent dismay when they found out “bigger” does not mean the same as “better”. Can you think of a better measure of service than the fact that our clients are unshakably loyal to StockTrans? Many of our clients have been with us for every day of their “public” lives, going back decades!
Ok, and for those of you who are dying to know, yes, a few years back we did enter one of those surveys; only we submitted all of our clients’ names. And the result was that of all the small to medium- sized transfer agents (who received more than just one or two hand-picked clients’ responses) we were, of course, number one.

Something interesting happened here recently

2008-03-17T06:41:00.000-07:00

Something interesting happened here recently. Our Director of Sales, Thomas Schneiders, came in to my office and said that when he was talking to a prospect (now a client), he explained that one of the differences between StockTrans and other transfer agents was our StockTrans Concierge Services. I asked Tom what he meant by that, because I had never heard that term in relation to stock transfer agents before.

Tom said “All the extra things and services that we offer to our clients that other stock transfer agents don’t, because of the length of time we have been in the stock transfer business, and because of the special market niche we fill. Like pointing our clients to who we think is the best vendor for them, based on our years of experience of being able to view the clients’ satisfaction through their eyes.” I said, “What kind of vendors are you talking about?” Tom said, “Good captive brokers for their stock benefit plans, investor relations firms, expert legal counsel, financial printers, PR agencies, and the like. You know, because we have been around so long, we know who is good for small to mid-cap companies, and who isn’t.”

That made me think: and here comes the interesting part (at least as far as we, as a stock transfer agent, are concerned). For years and years, I have been trying to figure out a way to describe the special care and personal involvement we provide all our clients, but I couldn’t put my finger on the right phrase.

I think Tom has done it; from our holding your hand through your annual meeting, to our real, live, experienced professionals who answer the phone, to assisting your shareholders when they want to sell their DRIP shares, to helping you set up an Employee Stock Purchase Plan, to offering the world’s greatest stock benefit plan full administration services and self-administration software, to answering all you shareholders’ questions with personal attention, to monitoring the time constraints of your SPAC, to helping you in your acquisition of another company, to easing the way for non-U.S. shareholders to transfer their shares, to explaining to you what the advantages and disadvantages are of participating in the DRS system vs. just being eligible for DRS, …well, you get the point.

StockTrans Concierge Services! That is who we are and what we do, and we’ve been doing it for almost 40 years! So, to Tom, for coming up with the perfect description of how StockTrans is different from all the other stock transfer agents-thanks, young man- I owe you one.

The History of StockTrans - Part Three

2007-11-01T04:28:00.001-07:00

So, how did we break through the stone wall put up by the big banks that dominated the industry? Funny you should ask… (Excuse the six month delay-I wasn’t in suspended animation. Au contraire! I was guiding us through the busiest year we’ve had in our 35 years. We’ve grown over 30% in just the past 12 months!).

By now, everyone knows that small businesses are the backbone of our economy-not just because they create a majority of our jobs, but because they sometimes grow into very big companies. In other words, (almost) every very big company started as a very little company. Well, back in the 70’s it wasn’t so obvious to everybody that small companies were indeed very important to our economy.

And none of the big bank agents were really serving the small companies. Oh, they had them as clients, all right, but they weren’t serving them. It was more like “You’re lucky we are taking you on as clients, so just be quiet and send us your money. We make you look good just by letting you mention our name in the same sentence as ours!”
Well, when there wasn’t much of a choice, there wasn’t much a small public company could do. There were some outliers in the transfer industry, of course, but the bigger non-bank agents wanted to be just like the bank agents, and the cowboys out west, were, at the time, let’s say…cowboys.

All of which leads us back to the question of how a very small transfer agent, in the heart of the financial megalopolis, headed by someone who, just like you, did not say as a child “Gee-when I grow up, I want to be a stock transfer agent!” , could establish itself in the “World of the Giants” (echo, echo, echo…). The answer was obvious to me and to anyone else who wasn’t inhaling through the 70’s—SERVICE! DUH! Something that was sorely missing at the time for all but the largest public companies.

The History of StockTrans - Part Two

2007-04-23T13:10:00.000-07:00

The most interesting aspect of the stock transfer business is the interaction with the whole world’s businesses. There is no kind of business in the world that does not have one of its players in the public company arena. And that means, of course, that StockTrans, Inc. has, or has had, stock transfer clients in every field of enterprise.

Perhaps the greatest educational element in our long 35 year history as a stock transfer agent has been what we have learned from the huge variety of our transfer agent clients. From companies that froze prize dogs ‘ -ahem- seminal fluids for future use in breeding, to the first company to sell CD’s over the internet, to french fry vending machine dreamers, to gambling in casinos from the sky, to bio-pharma companies working on new drugs for every illness you have ever heard of and many you haven’t, to national retail chains, to cruise lines, to the pre-cursor to AARP, to the first online traffic website, to the offspring of Gallup polling, to banks, investment companies, REITS, to nanotechnology, to cosmetics, to weight loss programs, to….well you get the picture.

What a great country! Almost everyone wants to be public! And anyone can get a chance. And they are all interesting companies in their own way, run by interesting people who need and deserve excellent stock transfer services at a fair price. Which of course, is where StockTrans, Inc. comes in?

But, let's go back to the late 70’s, when we were young. As I mentioned before, when I started working for the investment bankers, we were doing the stock transferring for the public companies we controlled or had significant interests in. Around 1974 or 1975, it occurred to me that there were a lot more micro and small to mid-cap companies out there than there were New York Stock Exchange companies. Yet the majority of these smaller companies were being handled by the giant bank transfer agents, and, most of the time, paying the same prices as the larger companies. But, and this is a big but, (sorry all you gangsta rappers but we aren’t talking about the same thing) they were getting service like, well, like they were at the bottom of the heap. So, I decided to try to get some stock transfer clients that weren’t part of our “captive” companies. I mean, if you are paying big bucks and getting lousy stock transfer service, why wouldn’t you be interested in someone who would reverse that situation for you. Simple, basic transferrian logic, right? Well…not so fast…

The History of StockTrans - Part One

2007-04-16T07:02:00.000-07:00

1972- I had just graduated from Penn State the year before and now I found myself working for a small, privately-held investment banking firm—if you can call four men and a woman an investment banking firm. What we did was find public companies that were in financial difficulty and try to turn them into thriving companies with a strong presence on whichever stock exchange they were trading. Of course, being low man on the totem pole, I was assigned to perform the stock transfer functions. Believe me, being a stock transfer agent in 1972 was a universe away from being a stock transfer agent today.

In those days, stock transfers were done by hand-and I don’t mean just issuing physical stock certificates. Whenever a share of stock was bought or sold, it came in to the transfer agent from the broker or the actual owner in to the stock transfer agent for that public company. Although a few giant banks had massive main frame systems that were really designed for banking services, which systems they tried to twist and contort into use for stock transfer and shareholder data maintenance, for the most part, the greatest part of shareholder and stock transfer data was kept on 3x5 or 5x6 cards.

Yes, there were IBM punch cards, but, by their very nature, they couldn’t give you any information at a glance, because all you saw were holes (or not holes) on a card! I guess the few of us who have been in the stock transfer business as long StockTrans can claim some of the dubious distinction of being the fathers and mothers of the infamous “hanging chads”. Take that Larry Birkhead and Howard K. Stern!

Back then, bank stock transfer agents controlled probably 90% of the stock transfer business (you remember Manufacturers Hanover, Harris Bank, First Chicago, State Street Bank, First Pennsylvania, Barnett Bank, Chemical Bank, Chase Manhattan, Crocker Bank, Morgan Guaranty, Continental, Marine Midland, etc., etc., etc.), don’t you? Well, if you don’t, maybe you’re not quite as old as I am. Someday I’ll give you a list of the stock brokerage firms that are long gone. You can look at it if you are having trouble sleeping.

Anyway, up until the early 1970’s, when StockTrans was just a gleam in my eye, there wasn’t a lot of room in the stock transfer business for commercial non-bank agents (aka commercial independent stock transfer agents) but there were always the smaller public companies who either couldn’t afford and/or didn’t want the impersonal service of the large bank stock transfer agents. You have to understand that stock transfer was a sideline for those banks, and a not very important sideline at that. The reason the banks controlled so much of the stock transfer business was that every time they made a loan or did some kind of financing for a public company client , the bank would try to grab all the ancillary business they could squeeze out of their now-debtor client. And the bigger the public company, the bigger the debt to the bank and the more of the stock transfer business would be forced into the hands of the large bank stock transfer agents.

Jonathan Miller - President

2007-03-12T07:40:00.000-07:00

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