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It's time to let you in on a dirty little secret: You may not own the stock you own. That's right, if you invest with a brokerage firm, the shares you bought are almost certainly not held in your name. Technically, they're held in the name of the Wall Street firm you do business with, hence the term "street name."
No, you haven't been robbed. Ultimately, the decision to hold shares on the books under a different name doesn't affect the economic ramifications for you. You¿re listed as the "beneficial owner," even though the firm is the official owner of the shares. But, you are giving up some rights, and investors concerned about good corporate governance might want to get that stock back in their own names.
Here's the problem: If your stock is technically owned by, say, Merrill Lynch, then Merrill Lynch gets to do things with it that might work against your wishes. Take short selling. Investors who want to sell shares short need to first borrow those shares. The lenders are often the big Wall Street firms that are handing out Street-name shares. So, if you feel that a company you own is a victim of aggressive short selling, chances are your own shares are being used to fuel the shorting.
Also, your brokerage firm can cast ballots on some corporate matters affecting a company without getting your input. Technically, this can only happen in votes considered ¿routine¿ by securities regulators. But, there's a big catch: some big events, like board elections, are considered "routine" under law.
The good news is that you can easily fix the Street name problem: Just request that your brokerage firm makes you the listed owner of the shares. If they refuse, find a new firm.
Home / Markets / Industries / Finance
Tuesday, June 10, 2008
Allied Capital Announces Results of 2008 Annual Meeting of Stockholders
Comtex
WASHINGTON, Jun 10, 2008 (BUSINESS WIRE) ----Allied Capital Corporation (NYSE:ALD) reconvened its 2008 annual meeting of stockholders today. Stockholders voted upon the proposal to authorize the Company, with the approval of its Board of Directors, to sell shares of its common stock below the Company's then current net asset value per share in one or more offerings. Over 46 million of the shares present at the meeting or represented by proxy were "broker non-votes" that did not vote on the proposal because, under the SEC's rules, brokers do not have discretionary authority to vote shares on certain proposals without obtaining voting instructions from the individual stockholder. Because these shares were present but unvoted with respect to this proposal, they had the effect of a vote against this proposal, and, as a result, the votes cast with respect to this proposal were not sufficient to adopt the matter. However, of the shares that did vote, 74% voted to adopt the proposal.
"We appreciate the support of our stockholders who voted on this proposal," said Bill Walton, Chief Executive Officer. Mr. Walton explained that, "Unlike many companies where the majority of the outstanding shares are held by institutional investors, approximately two-thirds of Allied Capital's shares are held by retail investors who generally hold smaller numbers of shares than institutional investors, so obtaining voting instructions can be difficult. Although we were not able to obtain the required vote on this proposal, we believe we had significant support from our stockholders who voted on the matter and, as a result, we intend to hold a special meeting during 2008 to seek approval of the proposal. We believe that having the flexibility to issue common stock below NAV in certain instances is in the best interests of shareholders, as we would not be precluded from accessing the capital markets and would be able to act quickly and decisively as attractive investment opportunities arise. Any decision to sell shares below NAV would be subject to the approval of the Company's Board of Directors."
About Allied Capital
Allied Capital is a leading business development company (BDC) in the U.S. that invests private debt and equity capital in middle market businesses nationwide. Founded in 1958 and operating as a public company since 1960, Allied Capital is celebrating 50 years of investing in and supporting the U.S. entrepreneurial economy.
Allied Capital provides long-term debt and equity capital for management and sponsor-led buyouts, and for recapitalizations, acquisitions and growth of middle market companies. Allied Capital's one-stop financing capabilities include first and second lien senior loans, unitranche debt, junior or subordinated debt and equity. Allied Capital seeks to invest in stable, less cyclical companies that produce significant free cash flow and high returns on invested capital. At March 31, 2008, the company's private finance portfolio included investments in 124 companies that generate aggregate revenues of over $13 billion and employ more than 98,000 people.
Allied Capital provides flexible, competitive debt and equity capital for management and sponsor-led buyouts, recapitalizations, acquisitions and growth of middle market companies. Allied Capital's seamless, one-stop financing capabilities include first and second lien senior loans, unitranche debt, junior or mezzanine debt and equity.
Headquartered in Washington, DC, Allied Capital offers shareholders the opportunity to participate in the private equity industry through an investment in the company's New York Stock Exchange-listed stock, which is traded under the symbol ALD. For more information, please visit www.alliedcapital.com, call Allied Capital investor relations toll-free at (888) 818-5298, or e-mail us at ir@alliedcapital.com.
SOURCE: Allied Capital Corporation
Investor Relations Inquiries: Allied Capital Corporation Shelley Huchel, 202-721-6100 or Media Inquiries: Sitrick and Company, Inc. Tom Becker, 212-573-6100
Copyright Business Wire 2008 ********************************************************************** As of Friday, 06-06-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated a DOWNTREND on 03-10-2008 for ALD @ $19.44. For more information on SmarTrend, contact your market data provider or go to www.mysmartrend.com SmarTrend is a registered trademark of Comtex News Network, Inc. Copyright � 2004-2008 Comtex News Network, Inc. All rights reserved.
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