How does a person who owns common stock in a company convert it into
actual dollars? Also lets assume that the preferred stock holders have
first right of refusal.

What a delicious question -- are you sure you aren't trying to figure
out ways for Google Inc. to spend its money? I'm not a Google
researcher, just one of the 300,000 plus who've passed the NASD #7 in
the United States, ten years ago.

Many preferred shares of stock include special powers, such as the
ability to buy newly issued stock ahead of the public, which is not
really "first right of refusal" as it's commonly used. Because you
don't mention that the stock is marketed on one of the "exchanges",
I'm assuming that this is a private "closely held" corporation.

In that case, although I'm relatively unfamiliar with stock in this
context, common commercial code practice is that if there is a
standing "first right of refusal," what you have to do is find someone
to make you an offer, and then relay the offer amount to the preferred
shareholders.

Here I have to make a quick note: if this is a question about Canadian
stock, etc., that might be good to clarify.

One other side note: a lot of common stock of small US corporations is
not "freely tradeable," so you probably need to give more info about
it in general terms. Do the certificates say anything, if there are
certificates? Is there a red seal or lettering on them? If it's
"Regulation A" it probably is tradeable.

Fun, huh?

Last I read, and I could be wrong, all public stock in the US has to
be "registered," and I think that this applies to small closely-held
stock too. It's not good enough to sell it under the table, the
Treasurer of the company must be notified, and the Treasurer then
might have to file a form with the SEC on Edgar, the public service
(There is also a public stock of the same name which is unnerving to
some of us.) if a trigger like enough shares were involved.

Listing non-public stock where interested investors can make offers
has been one of the sticking points of the evolution of the SEC and
the not-for-profit Delaware corporation NASDAQ whose 300,000
non-voting members likely didn't have any say during its
privatization. When I say "delicious," this is where I'm looking,
because technically, there is no reason why you or I cannot have our
very own stock, and there are a lot of great folks I would love to buy
a piece of. So, in a nutsehll, finding buyers to offer you a decent
price is a pain. I don't want to jump ahead to "contact a securities
lawyer" here for two reasons: first, most of the ones listed in the
phone book are looking to sue people like you, not help you, and
second, you'll do it eventually if it's important. We use lawyers
after we've read the instructions to share the responsibility, I only
get ticked when the instructions are unreadable, which is too often.

Why can't I list my stock for sale on the OTC market? Because the NASD
arbitrarily switched responsibility for listing stock to the
broker-dealer "market makers" who cannot be paid for carrying stocks
submitted to them, but likewise, do not have to accept any more stocks
for listing. And unless your company has over 500 stockholders like
yourself, it doesn't have to file much of anything with the SEC, let
alone become "public."

So, my guess is you'll guesstimate and try to find someone to give you
a conditional offer, and then you'll phone up or write the Treasurer
of the corporation and ask how they want the bid submitted for "first
refusal." I don't know if there are deadlines on how fast they have to
get back to you, especially if they want to offer the stock to the
Board first and it only meets once a year. Sticky. Most corporations
have their "year" begin in September.

Scottygett-ga,

    Thank you so much for such a prompt and thorough answer! Yes, this
stock is part of a small, private company. Who'd of thought selling
shares would be so complicated. If you don't mind me picking your
brain a little more... how does one find another person to make an
offer?

then there is the other perspective. much of the posted information
is, to be polite, just plain wrong. the poster has misstated,
mischaracterized, or is simply mistaken in many of the assertions he
has made. for example the tirade about market makers is laughable.
broker-dealers that make markets, make markets. they don't list
securities on exchanges, they don't control the listing of securities
on exchanges, and they don't control the exchanges. everything in that
paragraph is just plain old everyday wrong. worse than wrong is, it is
couched to the novice as informed observation. in fact everything in
this post after the line that reads, "fun, huh" is misinformed
nonsense.

as to the original question zumpoof, the answer to your question is it
depends. it depends on a lot of things that you haven't offered. the
nature of the corporation, what you own, how it was acquired, what
restrictions were part of the acquisition. what restrictions that were
part of the acquisition are still in force. you may have the full
right to sell your shares to anyone in the world or may not have the
right to ever sell the stock except back to the company at a
predetermined price or a million variations in between. until you know
what you own and under what conditions you own it, selling it will be
difficult. i suggest you start with the corporation. ask them. get a
clear statement of your rights and obligations attendant to the
ownership and transfer of ownership of these shares. if the
corporation is not forthcoming with that information, which should
have been delivered to you at acquistion and likely was, then contact
the corporations attorney and ask. if that doesn't get a satisfactory
answer, then you can contact a securities attorney. your problem won't
be that they just want to sue people like you, this is a statement
born of ignorance, more likely your problem may be the cost of that
counsel. if what you have is a very small piece of a small
corporation, you may find the cost of legal aid to exceed the value of
the holdings but i won't make that assumption because nothing you have
said indicates that. private companies can be worth billions of
dollars too.

so zumpoof, my suggestion to you is to ignore the babble and weak
attempt to complicate a fairly straight forward inquiry with a bunch
of extraneous material invented to obfuscate and just do what will
produce results. call the controlling interest at the issuing
corporation and find out what you own. get it in writing. offer them
your stock while you're talking. they are the most likely purchasers
for a number of reasons that don't matter at this point so i won't
discuss it here. now, get to work. it's your money.

Well, my goodness!  Scotty and Elwtee, you must be old pals.
But I  -reading your comments- cannot see that you are really saying
much different.  As an outsider with just a little knowledge of stock
broking from 35 years as a shareholder and 20 years in banking, I tend
to agree with Scotty, also because he has presented his credentials.
But as said, after Elwtee's tirade, it turns out that you agree that
Zumpoof is going to have to find out if there are any restrictions on
his selling his stock, and go on from there, finding a potential
buyer, etc.
True, Elwtee, that is then straightforward, but, for the questioner,
only after the possible problems have been mentioned, and Scotty made
the correct assumption that Zumpoof is wanting to sell shares in a
closely held company, whose stocks are not traded on an exchange.
The machinery of the exchanges is immaterial to the question since no
person potentially interested in buying the stock would look to the
exchange to buy it, since it is not listed.
Elwtee, I would be very interested in your explanation of what you
think is wrong about Sxotty's statements concerning broker-dealers and
market-makers.
But that has no bearing on the question, so a response would be
entirely voluntary  - but maybe I would learn something ...

myoarin,

i hesitate to respond at all as this really isn't the proper forum for
this discussion. on the other hand, after making some stern comments
about some comments i don't want you to think i'm ignoring you or
playing hit and run. even in my original post i considered
deconstructing the post i felt full of inaccuracies line by line and
point by point but decided not to do that. again on the basis of
propriety. i will continue to refrain from so doing too aggressively.
having said that here is what i will say.

let's start with words. words are powerful weapons. in the hands of a
craftsman they can be used to do many many things including convincing
a reader that you have said something you in fact have not. trial
lawyers make a living implementing that concept every day. i refer you
to your comment to me, "he has presented his credentials". to the
contrary, you have concluded as such but he has done nothing of the
sort. what he has done is carefully craft a sentence that gives the
allusion to the illusion of a credential. now the poster may actually
have a credential, i don't know, but he certainly didn't present it.
passing the exam in and of itself is meaningless. it is not a
statement that it was ever used professionally or that if it was it
was used successfully. in fact, brokerage firms regularly have
secretaries and admins pass the series 7 for compliance reasons but
that hardly makes them experts in the field of money management,
financial planning, or the mechanics of the securities markets. it
does allow them to say they passed the 7 ten years ago.

the post in question in fact offers some minimal information about
what may be required to sell this stock but even that is buried in a
flood of obfuscatory material of no use to the questioner. to me the
entire post was personal agenda diatribe sprinkled with a few facts to
give the appearence of information. statements such as 300,000
non-voting members, a delaware corporation, a reference to reg a
without a hint of what reg a is or why it may be relevant are examples
of the kind of meaningless banter used to impress the novice and serve
to create a foundation of perceived expertise on which to build the
rest of the house of cards.

"listing of non-public stock..." is an example of a statement that
appears to say something but is babble. you can't list non-public
stock. the first requirement to listing a security anywhere is that it
is public. the whole sentence makes no sense. in fact the whole
paragraph, no in fact the entire last few paragraphs is jabberwocky.
"whose 300,000 non-voting members likely didn't have any say..." is
trying to say something but what is unclear. non-voting members are
just that, non-voting members. they didn't likely have no say - they
are non-voting members. they have no say. what the status of the
non-voting members of any organization has to do with the question
about selling stock is escaping me. it is just more of the pretend
information being offered as an answer to what i called a fairly
simple question. i think you get the point.

as to your specfic question about market makers role in listing
securities on exchanges the answer is, as i indicated in my first
post, none. i have reread the paragragh in the post i took issue with
again and again and frankly it's barely english. it certainly doesn't
say anything of substance and it certainly has nothing to do with
answering the question. i'm not quite sure exactly what you want to
know about the market making process so i will just restate that
registering a security for public distribution, applying for listing
for that security on any exchange and making a market in that security
once it has been issued and listed are all seperate and distinct
enterprises. the post in question seems to imply some underhanded
collusion between the regulatory bodies and the broker-dealers that
underwrite issues and broker dealers that make markets in securities.
it appears to attempt to imply or say that the regulators have given
up or that broker dealers have usurped via market making activity the
authority of the regulating bodies. without a treatise on how these
operations work i will just repeat that this is nonsense. if you and i
crawl off the beach and open a broker dealer tomorrow (okay we can't
do that in one day but that's not the point here) and want to make
markets, we can. our input into the registration, public distribution
and listing of securities will be exactly what it was when we were
just beach bums, none at all.

finally, i disagree with your conclusion that the post i question and
mine are about the same. sans the couple of paragraphs i took to
deride the previous post there exists in my post a single paragraph
that is on point, instructive and directive as to what the questioner
needs to do and know. outside my poke at another answer i think i
answered his question, clearly and directly and put him on a path to
satisfaction or at least resolution. i don't think the same can be
said for the post i have questioned.

A series 7 stockbroker is just someone who passed (> 70%) a test
created by the New York Stock Exchange, that essentially prevents them
from "pleading ignorance" when they're arrested for giving bad
investment advice. It is not any kind of a securities law degree.

First correction: what the heck am I doing talking about the
commerical code? One regret after posting this was that I figured I'd
botched this sentence completely by going by a textbook I rarely
crack, and a few half-remembered things. The only reason I could think
of to refer to it is that there are decent books about the uniform
commercial code, and they're typically studied during business law for
small busines-owners courses, as taught by local commmunity colleges
-- which I haven't taken.

Now, the criticism that I jumped into a circus cannon by talking about
Regulation A -- I'm inclined to agree with. I took it that there was a
faint implication that this company gave the employee owner some
impression their shares might ultimately be publicly held, and ran
with it. I suppose redundantly referring to privately-held corporation
stock as not my thing might have helped.

Intellectually, I still think it's a cool thing to list limited
partnerships and closely-held stocks, and I've known a couple of
investors (13 years ago) who used services that probably still exist
in some form, and who did well or lost big as a result of "roll-ups."
Visiting this question before all the comments arrived, I noticed that
Google ads referred to a couple of related services that have appeared
since the ten years ago I walked away from brokerage. SOMETHING ELSE I
didn't make clear -- I passed the test and walked away. Yeesh, I'm
thinking I should watch more of that show with the "Starting Over
House," because I can't believe I let that read that way.

Mentioning "registered" stock, as Elwtee alertly pointed out, is
neither here nor there. But partly I figured if you had some
certificates, you'd be telling us about them in a clarification.

Elwtee is probably completely correct about securities lawyers here.
Most of the ones in the phone book are looking to sue sellers was my
point, but it wasn't well-put. Plus, you could ask the lawyer about
some of these peachy keen internet services I'm reading about from
these Google banner ads.

What I really like about Elwtee's answer is that he has you asking for
documents and getting proof and making an offer on the phone, in
practical terms. I'm inferring that he's done this before.

Private stock, not public. End of question. For all I know, private
stock can be bought and sold on EBay. (Okay, I know that it can't be.)
If you actually do sell it, zumpoof, I hope you post some sort of
comment we can read...


MYOARIN-GA's INVITATION:

Wasn't it Shaw who said "I'm all for keeping weapons out of the hands
of fools, starting with typewriters"? (paraphrase)

Doing this poster justice:

"as to your specfic question about market makers role in listing
securities on exchanges the answer is, as i indicated in my first
post, none. i have reread the paragragh in the post i took issue with
again and again and frankly it's barely english. it certainly doesn't
say anything of substance and it certainly has nothing to do with
answering the question. i'm not quite sure exactly what you want to
know about the market making process so i will just restate that
registering a security for public distribution, applying for listing
for that security on any exchange and making a market in that security
once it has been issued and listed are all seperate and distinct
enterprises. the post in question seems to imply some underhanded
collusion between the regulatory bodies and the broker-dealers that
underwrite issues and broker dealers that make markets in securities.
it appears to attempt to imply or say that the regulators have given
up or that broker dealers have usurped via market making activity the
authority of the regulating bodies. without a treatise on how these
operations work i will just repeat that this is nonsense. if you and i
crawl off the beach and open a broker dealer tomorrow (okay we can't
do that in one day but that's not the point here) and want to make
markets, we can. our input into the registration, public distribution
and listing of securities will be exactly what it was when we were
just beach bums, none at all."

First: sentence structure
is the haiku's first line
written in the Fall

But it seems to stop at haiku, darn it. Sorry.

Where I take a hauling huge glob of mud and pitch it, I really would
rather be heaping spoonfuls of sugar at the
NASDAQ/NASD/NASDR/OTC/OTCBB/NSQB network. Why I say you have to list
with market-makers is that small stocks obeying the historical
american model of a start-up stock do not list on the NASDAQ or the
NYSE, they list on the OTC. If they're cheap, they list away from the
OTCBB, on the traditional OTC, using www.pinkshets.com . But they must
be approved by a market maker, who isn't allowed to take money from
them. http://www.pinksheets.com/otcguide/issuers_index.jsp I like that
all I have to do is file my Regulation A, which last I looked (10
years ago) was still a bargain for a small issuer, and a "10-K" I
think, with the market-maker (though WHO you approach takes some work
-- pinksheets.com briefly listed initial (?) market makers for
specific companies, but not lately), who either approves or rejects
you. Do they BS you? Make you feel small, pretend like the OTC is
something it's not? Heaps, but that's an anecdote from ten years ago,
and not a canvass of the industry.

Lastly, Elwtee is stating that I can come off the beach and start a
broker-dealer with (last I heard) massive liquidity requirements,
(though the required expert help I could theoretically find using
monster.com) and I could kiss him/her, if he weren't crossing the
street to avoid being seen sharing the same sidewalk with me. Isn't
that cool?!

Mostly, I want to trust that the love comes back.

Hope that answers your question.

I should add, the quote is Frank Lloyd Wright.

And the pink sheets website is saying that the requirements to list
with them are less stringent than I thought, which could mean they've
improved them, or that I didn't read them right originally.

Technically, regulation A stock is not "registered," but a lot of the
finer points really are useless. I ask myself "FOR WHAT?!" A glorified
mailbox that state and federal laws and industry practice (downside of
a quasi-monopoly) have shrouded in a load of nonsense.

FOR WHAT?!

I wouldn't for a second try to sell my risky stock to a widow or
orphan, but industry rules tie my hands because of someone else and
the chance of them doing harm? How convenient! And because I can
always start a bookstore, I don't have to feel ticked about not being
able to sell my book without going through a wringer? Logical
disconnect.