How Easy & Inexpensive Is It To Buy Votes
How Easy & Inexpensive Is It To Buy Votes
I wanted to show a few examples with pictures to illustrate how inexpensive it can be to buy 100 votes
I am going to show pictures of each ticker with me going long 100 shares, short a call, and long a put. The call and put will be for the same strike and the same expiration. At the very end will be a summary table of upfront costs, losses/gains, and then some additional comments.
Please note:
- This assumes no early exercise, which is a risk to this.
- This assumes what is displayed on the ticket can be filled. Technically, it will not fill as optimally, but the gist of this is the key.
- This is all based on data from thinkorswim pulled around 11:30am on 3/30/2023.
Examples
TLDR Summary
- GME: for $2.4k, you can buy 100 votes and you’ll lose is $88
- Robinhood: for $1.1k, you can buy 100 votes and you’ll gain $13
- AMC: for $0.7k, you can buy 100 votes and you’ll lose $138
- Apple: for $16.8k, you can buy 100 votes and you’ll gain $194
- Microsoft: for $27.4k, you can buy 100 votes and you’ll gain $141
For 5 different tickers, this shows how you can shed some or all of your economic risk and have full voting rights. This is empty voting!
Fucking incredible and infuriating.
There's a portion in marketliteracy.org that talks about some of this (roughly). Corporate voting and all the related machinations around that are truly a complete and total sham.
You just figured out what a hedge is. Options transfer risk (but not ownership). It's not free. You've sold your upside with the call, plus "it will not fill as optimally" means that you lose money in transaction costs.
Your 100 votes doesn't mean anything. There is not enough open interest (in options) to be meaningful, plus it would move the market strongly against you. And, you know, the SEC would need to know what you're doing once you have 5% of the shares.
You are not understanding the import here.
This excerpt puts it well, "...Thomas Montrone, chief executive officer of Cranford, New Jersey–based Registrar & Transfer Co., which oversees shareholder elections. 'It is an abomination,' Montrone, 58, says. 'A lot of the time we have no idea who’s entitled to vote and who isn’t. It’s nothing short of criminal.'"
Some related reading here, as well.
Are you saying voting rights don't matter?
This is showing how easy it is to get into empty voting positions.
Thank you for this! Great content. Kudos Ape