Thread by @dlauer

A quick thread on DRS - holding shares directly w/the company in your name. Most individual investors buy shares with a broker & those shares are nearly always held in "street name." This means they are held under the broker's name. The buyer is not visible to the issuer.

Despite holding shares in "street name" you are still supposed to have all of the rights that come with holding shares, including dividends and the ability to vote. However, that is not always guaranteed.

In 2021, @terminalarc & others led a movement by GME shareholders to vote their shares in the company's AGM. This was primarily done on Reddit, was well organized, with detailed information on how to vote your shares & regular encouragement to do so.
reddit.com/r/Superstonk/c…

@terminalarc They mounted an unprecedented campaign, even figuring out how to get international brokerages to allow GME investors to vote their shares. Now, with all that effort, did every vote count? Probably not.
reddit.com/r/Superstonk/c…

@terminalarc Only brokers know for certain whether there was an "overvote" - meaning more votes submitted to the broker than total number of shares held in “street name” by that broker. But this problem is well documented, and many people and orgs have been fighting for changes for years.

@terminalarc For example, @SusanneTrimbath documents repeated concerns expressed to the SEC via comment letters about overvotes and votes being thrown out in order to address those overvotes.

https://twitter.com/SusanneTrimbath/status/1590112567711928320

@terminalarc @SusanneTrimbath When an overvote happens, share totals are truncated & excess votes thrown away by the broker. Votes might only count fractionally if brokers have too many votes based on the shares they were holding. Or votes might be thrown away. If it’s your vote, you wouldn't even know.

Partly in response to difficulties exercising votes, and partly to prevent their shares from being lent out or considered for locates, a movement started on Reddit to encourage GME shareholders to directly register shares - take them out of "street name", to DRS.

Direct registration is something we've been talking about for a while now, although of course not enough to satisfy everyone. Regardless, we've held an AMA to get more information about it out there, tweeted about it & have spoken on space calls about it. reddit.com/r/UrvinFinance…

I won't pretend to be an expert on the topic, though I've tried to learn. My personal opinion is that more direct relationships between issuers & investors is a good thing for markets. There are pros/cons of course and everyone has to make their own decision after weighing them.

The emergence of the modern individual investor has been accompanied by a unique movement where investors become the biggest fans, best customers and most passionate supporters of their investments.

I love that.

I don't think many people outside of Reddit and Twitter are paying any attention to this. Shareholders in GME directly registered 28% of the float (as-of July 2022). If the current trend continues, the entire free float could ultimately be locked - that's unprecedented.

In any case, there are serious & clear problems w/street name stock arrangements, as the GME shareholder vote among many other incidents has exposed. Part of our mission at #WeTheInvestors is to give individual investors more transparency, choice & control over their investments.

As part of our second major effort after targeting PFOF and excessive off-exchange trading, we are focusing on securities lending, direct registration and settlement/clearing reforms. We’re looking for several upgrades/changes:

Having companies disclose directly registered shareholder numbers, having brokers default to NOBO designations, giving investors more control over lending, making it easier to directly register your shares, and ensuring shareholder votes can be placed and confirmed.

You can support this effort by signing our second letter and helping to spread the word: urvin.finance/advocacy/we-th…

#WeTheInvestors are focused on fixing markets and addressing problematic practices that distort prices and negatively impact markets. I hope you'll support us!