I started off small in the 1990s with bank stock conversions by typically purchasing one or two hundred stocks in an IPO. My success with the bank conversions finally let me buy thousands of shares in more contemporary IPOs. The account outline below shows some of the mutual bank stocks I bought in an IPO in the 1990s. The cost of the 2,589 shares was $25,890 (2,589 x $10 per share = $25,890). The market value was $52,103 leading to a $26,213 profit and a 101% return.
Market Cost of $52,103 Minus Price of $25,890 = Profit of $26,213
Buying Conversion Stock in a Community Offering
Depositors at mutual banks have priority subscription rights in the event the bank decides to convert to stock possession. It's actually possible to buy IPO stock even though you don't have a deposit account at the changing bank. Occasionally depositors with priority rights don't purchase all of the available stock making it available to the public in what is called a Community Offering. Examples of Community Offerings would include the Port Monetary, Hudson City Bancorp and Connecticut Bancshares conversions.
So as to purchase stock in the Community Offering you must call the bank and obtain a stock order form and prospectus. The stock order form must be finished and returned to the bank before the Subscription Offering Cut off point. A check to cover the quantity of shares bought must be included with the stock order form. It typically takes one or two weeks after the Subscription Offering Cut-off point for the stock to be allotted and for stock certificates to be mailed to clients.
Examples of MHC 2nd Stage Offerings
Enclosed on the subsequent a few pages are stock price charts of Mutual Holding Firms that conducted 2nd Stage Offerings. This subset of price charts reflects the price movement of the minority stock prior to the completion of a MHC 2nd Stage Offering. Notice the price appreciation realized by minority shareholders prior to the second stage conversion.
MHC System Current Profit Results
I make trade suggestions for MHC stocks which can on occasion be purchased in a broker account thru my advisory service. The table below lists the current open trade profit results for the MHC Strategy. The portfolio has $59,323.30 in open trade profits with an average return of 34.8% before commissions.
Many MHC stocks are regarded as worth stocks as they usually have a good Price to Order values and significant money on their balance sheets re stock cost. As an example, I listed the money per share as a proportion of the prevailing stock price for a sample of MHC stocks below.