What To Do with Oddlot Shares From Stock Dividend?

Have you guys received your 30% stock dividend from MBT (Metrobank)? I received mine. Whenever I am receiving dividends from publicly listed companies, it’s always a great feeling. And it never grows old.

MBT’s price is around 80 so its board lot is 10 because its price is between 50 and 1000 pesos. Please see below board lot table.

If stock price is 1000 pesos or more	Board lot is 5
If stock price is between 50 and 1000 pesos	Board lot is 10
If stock price is between 5 and 50 pesos	Board lot is 100
If stock price is between 50 centavos and 5 pesos	Board lot is 1000
If stock price is between 5 centavos and 50 centavos	Board lot is 10,000
If stock price is between 1 centavos and 5 centavos	Board lot is 1,000,000

Let’s say I received 312 MBT shares as dividends. I can sell the 310 MBT shares at the main board while the remaining 2 shares can only be sold at the oddlot board.
When I checked the number of shares I received from MBT, I noticed that the number of shares credited is not rounded off to ten. May butal siya. 

Dreaded Oddlot Shares

So what will I do with these 2 oddlot shares? The bid and asking price for oddlot shares generally deviate from the current price of the stock considerably. To illustrate what I am trying to convey, see below BPI’s real time quote.

COLFinancial screengrab

The bid and asking price were heaven apart from each other! Yesterday, BPI price is 96.50. If you want to buy 8 oddlot shares, you need to pay 144.50 per shares, a 50 increase from yesterday’s price! On the other hand, if you want to sell your 2 oddlot shares, a buyer is willing to acquire your 2 oddlot shares at 90.15, a 7% decrease from yesterday’s price. The price fluctuations at oddlot board are quite huge.

Now, let’s take a look at the main board lot. The bid and ask spreads are reasonable. They are sensible. The bid and asking price do not deviate much from yesterday’s price.

COLFinancial screengrab

Strike While the Iron is Hot

MBT’s 30% stock dividends were distributed yesterday. The recipients include owners, institutional investors, and of course us, the retail investors. I am 100% sure that I am not the only one who receives an oddlot shares from this 30% stock dividend. Since the oddlot shares are still hot and fresh, retail investors having oddlot shares dilemma flock the market to either buy or sell their oddlot shares.  Take a look at the oddlot board of MBT today.

COLFinancial screengrab

The bid and ask spreads did not deviate much from yesterday’s price because there are retail investors who either want to buy or sell their oddlot shares. Hundreds if not thousands retail investors received oddlot shares in this 30% stock dividend of MBT. The evidence is not lying. Did you notice the number of MBT trades for oddlot today? The total is 97. That was a sizable number for oddlot shares trading. If you compare it with BPI’s oddlot shares above, BPI’s number of oddlot trades is only 3.

NOW is the time to buy oddlot shares while the price is still reasonable. In my case, I need to buy 8 oddlot shares so that all my shares can be traded at main board in the future.

Alternatively, if I want to sell my two oddlot shares, I’ll do it now while the price is still sensible. It won’t be too long before MBT’s trading of oddlot shares will exhibit absurd bid and ask spreads similar to BPI above.

What to do?

If you have oddlot shares, I suggest that you either buy or sell them NOW while the prices are still sensible and buyers and sellers abound. Since I am long term investor, I just bought 8 shares of MBT so that in the future, I can sell them at the main board and within the market’s reasonable fluctuations.

Related Reading: What Stocks Can You Buy for 5000 Pesos