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No. of Recommendations: 5
Hi illini1990,

As of June 4, 2004, there were approximately 600 owners of record of the Company's Common Stock.

Comment: Wow! So, if I showed up to the stockholders meeting,
I'd be one of 600 people? This goes to show just how volatile this
stock can be if only 600 shareholders are trading ... am I interpreting
this correctly?


Unfortunately not.

The owner of record is the entity that is recorded on the share register. However, most investors are not actually on the shareholder register. Instead, the shares are held in 'street name', or in the name of the brokerage account that the shares were held by.

Let's say, for example, that you buy shares in CNS through Freetrade. Freetrade buy the shares on your behalf through an account that they run. They mark the shares in their records as belonging to you, but they inform CNS that the Freetrade account has bought the shares. If you then sell the shares to another Freetrade account holder, CNS knows nothing about it, but Freetrade change the ownership record in their own ledger.

Now, this does have benefits- the company only deals with one entity, Freetrade, instead of all the shareholders. They can also reduce the amount of documentation needed, and they make a single payment, where appropriate (e.g. dividend), and let the broker deal with splitting the money up between the various shareholders.

On the other hand, it can make things more difficult, or even exclude options. For example, someone who owns Berkshire Hathaway shares in their own name gets sent an invitation to the AGM, but those who hold the shares in street name have to get confirmation from the brokerage in order to apply for a ticket.

Similarly, a lot of shareholder perks, of various types, are limited to shareholders who hold the shares in their name, etc. Again, Berkshire has a charitable donation scheme, but, IIRC, it is only open to those who hold the shares in their own name. Companies that give their products away to shareholders will often also require proof of holdings, requiring documentation from a broker if held in street name, or may not send them to those not named on the register.

Finally, one important point is that shares held in the shareholder's name cannot usually be lent out by a broker, unlike those in street name. Therefore, shares that are held in the shareholder's name are not eligible for shorting.

So no, just because you are a shareholder does not mean that you are one of 600 owners of record- if that was the case, it might be easy for HG subscribers to dominate the AGM, at least in terms of bodies ;-)

Lost
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