- What business does CMG Partners conduct?
- I've received an offer from CMG in the mail, how did you get my name?
- Your offer price is less than the Company says my shares are worth, and the price at which they are shown on my statement. Why is there such a lower amount?
- Why should I consider selling my shares to CMG?
- How long does it take to complete the transfer?
- When will I be paid?
- What is a Medallion Signature Guarantee?
What business does CMG Partners conduct?
CMG Partners, LLC is organized as a limited liability company in the State of Washington. We provide liquidity options for investors who own non-traded investments such as REIT's, Limited Partnerships, and non-publicly traded stocks. Simply put, we provide options for shareholders of non-traded securities to sell when few or no opportunities to sell exist.
I've received an offer from CMG in the mail, how did you get my name?
In most cases, shareholders have a right to obtain a roster of the names, addresses and quantity of shares owned by all shareholders who also own a given investment. Such provisions are usually included in bylaws or charters of companies to allow for shareholder communication with one another, such as proxy communications, tender offers, etc. CMG either obtained your contact information through that manner, or as the result of filing a registered tender offer with the SEC. Such a registration directs the issuer to either deliver the offering documents to the investors, or provide the requesting shareholder with the roster. In such cases where we are provided a list of shareholders, we maintain the confidentiality of that information to the highest possible standard.
Your offer price is less than the Company says my shares are worth, and the price at which they are shown on my statement. Why is there such a lower amount?
Issuers of securities, such as REIT's or Limited Partnerships are accustomed to providing their shareholders with an estimate of what they believe the shares are worth, based on a hypothetical liquidation of the company's assets, and a subsequent liquidating distribution to the shareholder, in some cases referred to as "NAV" or "Appraised Value". Of course, that is an estimate of what the shares might be worth if the company were to sell its assets and liquidate. Any asset, of any kind, is really worth today, what it can be sold for today, not an estimated future value, based on a hypothetical future sale.
Brokerage firms and/or investment companies typically list illiquid shares at either the price that you paid for the shares, or the most recently published NAV, if one has been provided. Because the shares don't trade on any formal securities exchange, it would be extremely difficult for them to price those securities in any other way. Often times this can lead to a bit of a surprise when an offer such as one from CMG is provided, where the price is less than what the investor has been accustomed to seeing every month on their statement.
A buyer of illiquid securities like CMG will require that the purchase price offered be at a discount to what they think the shares might ultimately return over the longer term because of the time value of money. This is often referred to as the "liquidity discount". The magnitude of that discount is based on a variety of factors such as, the financial stability and risks of the investment, the estimated time frame to a liquidity event, and the payment (or lack of) current distributions. Since buyers such as CMG are providing liquidity by purchasing your securities, they too will then own an illiquid security, and will have to build in a discount in an effort to build in a profit, as any investor would.
Why should I consider selling my shares to CMG?
- CMG's offers are always CASH offers; in other words, we are not offering to exchange one security for another. You will receive your cash proceeds for your shares as quickly as we can get the transfer completed.
- CMG does not charge brokerage fees or other transaction costs; therefore, you don't have to worry about being subjected to layers and layers of fees or commissions. In some rare cases, the transfer process will require a transfer fee that CMG is unable to absorb into its offer price. However, in such cases, any such cost will be made known to you, in a clear fashion, before you make your decision to sell and bear that cost. We want you to be well informed in advance concerning the details of how a transaction with us is settled and completed.
- In most cases, CMG can provide you the option of selling some or all of your shares. Some issuers will not allow a partial sale, but that is rare, and such a circumstance would not be determined by us.
- Often there are few if any alternatives to sell illiquid shares. Our offers provide an efficient, firm priced, specific offer for those who may want to sell their investment. Other options can be available, such as auction markets for illiquid securities, but such options involve fees and commissions, an uncertain price, require much more paperwork, and generally take much longer than a sale through CMG.
- Illiquid shares usually come with cumbersome ownership issues, such as K-1 tax reporting requirements which can be costly and difficult from a tax-return perspective. If owned in an IRA account, custodians tend to charge fees to hold such securities due to the added challenges they face in terms of recordkeeping and valuation. Shareholders may wish to divest themselves of a highly illiquid and costly investment.
- At CMG, our goal is to complete your sale as quickly as we possibly can, get you your check promptly, and provide you with excellent customer service along the way.
How long does it take to complete the transfer?
Once we have all of the required signatures and documents needed from you, it usually takes approximately 3 to 5 weeks for the transfer to be completed. In some cases, certain investments can take longer depending on how your shares are registered (an IRA for example), or if we need additional paperwork from you to satisfy the transfer agent. Issuers of liquid securities use a transfer agent to process transfers, that CMG (or any other buyer) will have to work with to complete a transfer. In most cases, the transfer agent is a third party firm which processes the transfer from seller to buyer. While some securities are more challenging than others to transfer, we do everything in our power to get the process completed. We want the transaction completed as smoothly and quickly as you do! You can call us and let us know which security you are considering selling, and we will typically already know how long that particular transfer will take.
When will I be paid?
CMG pays within 3 business days of our receiving a written confirmation from the transfer agent that the transfer to CMG is completed.
What is a Medallion Signature Guarantee?
A Medallion Guarantee is a signature stamp which is required for all transfers of non-traded securities. This is not a requirement imposed by CMG, but is a universal requirement industry-wide. The purpose is to protect you from anyone other than you attempting to sell or transfer your shares. A Medallion Signature Guarantee can be obtained at no cost from most commercial banks or brokerage firms. The best option is to contact your bank or investment broker to determine if they can provide this for you. A Notary is no longer able to notarize your signature in most securities transaction, and so, transfer agents will reject signatures that are not Medallioned. Please call us for any help you may need with this.