J. P Morgan Chase is dropping Panasonic from their ADR...Maybe

C

Cabin1111

03/08/2024 2:27 PM ET

Panasonic Holdings will be terminating their deposit program with J.P. Morgan Chase (JPMC) for these ADR's on March 28, 2024.

I don't know how to move on this...

Read below if you may be able to help.

I've put April 4 on the calendar to call Fidelity and review my options...I have 500 shares.

Each ADR is convertible into one (1) underlying ordinary shares.

Holders wishing to convert their ADS's and take delivery of ordinary shares can do so through April 22, 2024. If you convert, you will be required to pay a cancellation fee of up to $0.05 per ADR surrendered. Plus, any applicable taxes or governmental charges. Holders who do not instruct to convert by the above cutoff, will continue to hold the ADR position and the depositary (JPMC) will attempt to liquidate all remaining underlying shares held. You will receive the net proceeds, if any, from the sale once all the underlying shares have been sold.

** NOTE: JPMC has indicated a possibility of establishing an "Unsponsored" ADR Program, which is currently anticipated to open on or around April 1, 2024. Should JPMC successfully establish an Unsponsored ADS Program, any shares still outstanding as of the end of this event will automatically be converted into the Unsponsored Program. No cancellation fees will be applied to this.
 
Cabin1111 said:
03/08/2024 2:27 PM ET

Panasonic Holdings will be terminating their deposit program with J.P. Morgan Chase (JPMC) for these ADR's on March 28, 2024.

I don't know how to move on this...

Read below if you may be able to help.

I've put April 4 on the calendar to call Fidelity and review my options...I have 500 shares.

Each ADR is convertible into one (1) underlying ordinary shares.

Holders wishing to convert their ADS's and take delivery of ordinary shares can do so through April 22, 2024. If you convert, you will be required to pay a cancellation fee of up to $0.05 per ADR surrendered. Plus, any applicable taxes or governmental charges. Holders who do not instruct to convert by the above cutoff, will continue to hold the ADR position and the depositary (JPMC) will attempt to liquidate all remaining underlying shares held. You will receive the net proceeds, if any, from the sale once all the underlying shares have been sold.

** NOTE: JPMC has indicated a possibility of establishing an "Unsponsored" ADR Program, which is currently anticipated to open on or around April 1, 2024. Should JPMC successfully establish an Unsponsored ADS Program, any shares still outstanding as of the end of this event will automatically be converted into the Unsponsored Program. No cancellation fees will be applied to this.
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VW did this back in 2018 +/- ... during dieselgate lol. I actually had 100 shares in an IRA, I just closed them out before the cut-off. And of course it went up later as an unsponsored ADR. :rolleyes:

There's a bunch of chatter about these large Japanese companies having to boost their union contracts pay packages by quite a bit. You might wanna see what that's all about and how it'll effect Panasonic. Might just be easier to close it out now and not worry about it.
 
vanzandt said:
VW did this back in 2018 +/- ... during dieselgate lol. I actually had 100 shares in an IRA, I just closed them out before the cut-off. And of course it went up later as an unsponsored ADR. :rolleyes:

There's a bunch of chatter about these large Japanese companies having to boost their union contracts pay packages by quite a bit. You might wanna see what that's all about and how it'll effect Panasonic. Might just be easier to close it out now and not worry about it.
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As I recall, JPM has a phone number for ADR questions. Because I called it lol. They never called me back. Obviously they didn't realize who VZ was.:D

Anyway, from 2018:


Volkswagen ADR change from VLKAY to VWAGY
Volkswagen sponsored an ADR program whereby investors could invest in Volkswagen using securities traded on US exchanges. This security traded using the symbol VLKAY. The company recently terminated this Volkswagen sponsored security.

JP Morgan decided to create a non-sponsored ADS program to allow US investors to continue to hold a Volkswagen based security traded on US exchanges. This new security trades using the ticker symbol VWAGY. VLKAY and VWAGY shares did not share the same relationship to the parent shares traded on German exchanges.

The easiest way to handle this change is to treat it as a simple merger. The following instructions are based on publicly available information regarding the relationship between the sponsored ADR program and non-sponsored ADS program.



The Merger Entry

Go to Transactions > Merger or Accounting > Securities > Record merger of securities depending on the version of the software being used. If you are unfamiliar with merger transactions you can get help at this URL: https://www.iclub.com/support/kb/default.asp?page=normal_merger



Here is the information you need to complete the merger.

Date: 8/14/2018

Old Security or Merging Company: Volkswagen ADR (VLKAY)

Price per share of old Security / VLKAY: Use your last valuation statement price

Cash received: See your broker statement for cash-in-lieu

New Security: Volkswagen ADS (VWAGY)

Price per share of new Security: 15.90

Shares received : 2.0 x (#of VLKAY shares owned)

(Remember to include fractional shares.)

For example, if you owned 100 VLKAY shares, you should receive 2.0 x 100 = 200 VWAGY shares.

Save the transaction and the merger has been entered.





Note: Owners of VLKAY shares may still have the option of exchanging these shares for the parent company German shares. This will depend on your broker. Your broker may not hold shares traded only on foreign exchanges and will only allow an exchange for the new VWAGY shares or may have automatically made this exchange.
 
And the difference between a non-sponsored ADS program and a sponsored is???

So this may become a trend in Japan...What about other countries?
 
Cabin1111 said:
And the difference between a non-sponsored ADS program and a sponsored is???

So this may become a trend in Japan...What about other countries?
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Regarding the underlying stock's movement post conversion or the SEC rules differentiating the two?

The first one... anybody's guess, like any stock. The second, a simple google search will give you the answer.

Regarding "other countries"... I have no idea on how Japanese labor relations work. Nor do I care to look. But here, I'll do the google search on the mechanics of the difference for you.
__________________________________


1. Introduction to Unsponsored ADRs
Introduction to unsponsored
Introduction to Unsponsored ADRs
1. Introduction to Unsponsored ADRs

Unsponsored american Depositary receipts (ADRs) are a unique type of ADR that differ from sponsored ADRs in several key ways. While sponsored ADRs are established through a formal agreement between a company and a depositary bank, unsponsored ADRs are created by a third party without the involvement or consent of the company whose shares are being traded. This means that unsponsored ADRs may lack the same level of support and information provided by the company, but they also offer distinct advantages for investors looking to diversify their portfolios.

2. How Unsponsored ADRs Work

Unsponsored ADRs are typically created by financial institutions or broker-dealers who purchase shares of foreign companies on their own initiative and deposit them with a depositary bank. These depositary banks then issue ADRs based on the deposited shares, allowing investors to trade these ADRs on a U.S. Exchange. Unlike sponsored ADRs, which are subject to a formal agreement between the company and the depositary bank, unsponsored ADRs do not involve any direct communication or cooperation with the company itself.

3. Advantages of Unsponsored ADRs

One of the primary advantages of unsponsored ADRs is the increased exposure to international markets that they offer. Since unsponsored ADRs are created without the involvement of the company, they can provide access to companies that may not have sponsored ADRs available. This allows investors to diversify their portfolios and potentially benefit from the growth and performance of foreign markets.

Additionally, unsponsored ADRs are often more flexible in terms of trading and liquidity. While sponsored ADRs may have certain restrictions or limitations, unsponsored ADRs can be freely traded like any other stock. This can be advantageous for investors who value liquidity and want the ability to buy or sell shares at any time.

4. Considerations for investing in Unsponsored adrs

When considering investing in unsponsored ADRs, it is important to conduct thorough research and due diligence. Since these ADRs lack the support and information provided by the company, investors should carefully assess the financial health, governance, and regulatory compliance of the foreign company. It is also advisable to monitor news and updates related to the company and its industry to stay informed about any potential risks or opportunities.

Furthermore, investors should be aware that unsponsored ADRs may have lower trading volumes and liquidity compared to sponsored ADRs. This can impact the ease of buying or selling shares and may result in wider bid-ask spreads, potentially affecting the overall cost of trading.
 
I have it on my calendar to call either tomorrow or Thursday.

When I have called before on foreign companies (Schwab/Fidelity), they won't say much.

This is because they are not allowed to practice law (give advice), they are usually vague on insight...

What I did a year or so ago, (when I bought stock in GrainCorp [GNC.AX Australian]) was just to bite the bullet and bought on their exchange. The stock is a core holding that I plan on keeping for years (7th largest grain company in the world). I went on the Tokyo exchange and bought Toray Industries (TRYIY) years ago too. Both were like $50-$100. in fees...But I am willing to buy and hold for both.

J.P. Morgan Chase is big enough to handle these issues I believe.

If there is a unsponsored ADR established by them (and they can be exchanged for the sponsored one), I will probably do that.

Hang tight for a day or two and I'll let you know what I did (Which could be very wrong)!!

PS With the GrainCorp dividend, I get it in Australian dollars. I have chosen to not exchange it for US dollars...I think there is a 1% exchange fee. So I am holding about $400. Australian dollars earning nothing in my account. I just keep it there for protection against runaway inflation in the US...
 
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I think the LVMH, Hermes & Richemont stock I own are unsponsered ADS (they trade on the OTCBB like most of the Grayscale crypto CEFs). Ferrari on the other hand is a real ADR, hence the options on it but not the other three luxury stocks.
 
I called Fidelity this morning...Then I'm heading back to sleep (CA time).

As of yesterday, my shared got converted to the unsponsored version...It looks like no fees were involved and no partial shares to deal with.

I asked about volume of trade...It is all over the place and lighter that before.

I asked about the current bid/ask. The service person (at the international desk) said that there was a 3 cent difference between bid/ask.

So it has been done...Live with it. As someone said above, come tax time, treat it as a merger.

Happy dreams in California...
 
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