Interesting info from the KEEPR FOO poll responses
As I mentioned yesterday, a huge number of people responded to the poll that asked, for the KEEPR FOO, the number of shares each investor requested, the number of shares each investor received, and the broker used by the investor to make the request. There were 48 responses over the weekend, and additional 3 yesterday, so we reached a nice healthy 51 total responses.
The most common broker used to request shares was PSE EASy (42%), which we will get to in a second because that had some interesting consequences, but here are all the responses, grouped by broker:
Whole pile of PSE EASy, followed by COL Financial [COL 4.03 0.49%], BDO Securities, and First Metro Securities. That’s about right. Now where it gets interesting is in the number of investors that received their full 100% allocation. Only 21 out of the 51 respondents said they got the full amount they asked for; that’s 41% of the total group. But, if we split out just the PSE EASy investors, we see that 15 of the 22 PSE EASy investors received 100% allocations; that’s 68% (almost nice) for the PSE EASy people, and just 21% for everybody else. When we take a closer look at just the PSE EASy cohort, we can see very clearly that everyone received 100% of their allocation right up until requests of 67,000 in size; after that, the next reported request was 90,000 shares and it received only a 74% allocation. The “% allocation vs. # shares requested” line looks pretty clear for the PSE EASy people:
Someone making that same 67,000 request through COL would not have had the same luck at all. For COL, the highest request amount that was fully allocated was just 2000 shares. All of the 8 other requests, ranging from 20,000 to 500,000, received some oddly low allocation, but without the clear “line” like we saw with the PSE EASy crowd:
So now the chart looks like a mess, but that’s because COL doesn’t appear to have used some uniform rule for allocation that was tied to the number of shares requested. Someone who requested 33,000 shares was allocated just 17% of that request, while another who requested 66,000 shares was allocated 20%. Someone who requested 105,000 shares was allocated 12%, while someone who requested 500,000 shares was also allocated 12%, whereas a third person that requested 100,000 shares was allocated just 5%.
The same story plays out with the other brokers. The largest request to receive 100% allocation was a 100,000 share request made with Meridian Securities. PSE EASy completely denied a request for 600,000 shares, as did COL for a request of 20,000 shares and a request of 100,000 shares. The largest request to receive 100% allocation with BDO Securities was 1,000 shares.
MB BOTTOM-LINE
Keep in mind here that this was an informal poll, and everyone who participated was self-reporting. I didn’t ask for receipts, and I didn’t verify any of this data with any of the brokers. That said, the findings back up what I was hearing from Barkadans last week; namely, that those who requested somewhat modestly through PSE EASy were quite successful at bagging 100% allocations, and that those same requests made with other brokers, even huge brokers like COL, BDO Securities, or First Metro Securities, were simply not as “lucky”. Assuming the reported values are true, it feels as though the PSE EASy system uses a distribution rule based on the number of shares requested, but that the other brokers use a similar rule that sometimes applies and sometimes doesn’t, and we don’t really know why. I’ve reached out to the PSE for a better explanation of this process, both within the PSE EASy system and outside of it, and I hope to have that information to you soon. The best that I can say now is that for popular issuances, it might pay to make a request with your broker AND with the PSE EASy system.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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