Skip to main content
No. of Recommendations: 5
BigTymer2,

I think this slowness problem could be solved if these companies would all offer direct stock purchase programs. It is kind of ridiculous that they make us go so far out of the way just to "GIVE" them our hard earned money. I can't see how a company can justify requiring a person to own one share of the company stock to enroll in their drip program. The only thing I can think of as to why these companies do not offer direct stock programs is due to laziness.

DRIPs were born a few decades ago as a way for companies to help their shareholders increase their stake in the company. If you aren't a shareholder, then you don't fall in this group...so it's not that they are requiring anything; they simply created these programs for shareholders.

Direct-enrollment plans weren't created until about a decade ago, and the transfer agents have promoted them (with lots of fees) as a money-making vehicle. Someone has to pay...you or the company, if not both. So, far from "giving" your money to the company, they are (in the case of a no-fee plan) paying your way.

Also, early on, shares purchased were from treasury stock, so the investment funds did, indeed, go into the company coffers. Nowadays, most plans purchase shares on the open market for your benefit, so the company itself receives nothing.

You're also not "giving" anyone money since you are receiving stock in exchange for cash...and if you are fortunate enough to do so at little or no cost, then, count your blessings...:)

dave fish/moneypaper
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.