Do you hold them in an ISA? If so, another factor to consider is whether you can still do so if they delist.
Since they would no longer be listed on a recognised stock exchange, you might want to consider finding whether the stock will lose it’s ISA-eligibility status.
Still have faith now?
This is going to 0
What’s going to happen if they are delisting and becoming private? I would have hoped that they would pay the current share price to the existing investors.
Or they can just delist and run away?
750 to 1 into the new private company, but this new company is not public yet so how this share conversion is going to work?
I am 80% down now so thinking can it go any lower or better to stick and see what happens.
They could be waiting for the shares to run so low, so if they do buy you out at that current share price it would be so low it would be next to nothing. That’s a cheap way of getting your company back. If I was pulling a fast one that’s what I would do.
But maybe they are not pulling a fast one.
Not sure that would be the best way to enter the US exchanges 
Best to wait and see what happens.
Unless I’m mistaken and from what I understand, the consideration shares would be given at a consolidated 750 current shares -1 NM share at a price of £7.50 per NM share, meaning the value would technically be at 1p per current share. The company would be private for a while then between delisting from the LSE and hopefully being listed on the US market in 2023.
If it is the case I don’t know why people are selling up at these prices when they are due to be consolidated at 1p.
Just want to see what Freetrade (who aren’t sure yet what they are doing about the situation and are waiting for more information to come out, probably from the GM on the 20th) about having it in my ISA and hopefully being able to just transfer the new shares into my general investment account instead and then switching them back into my ISA when they relist.
I would strongly argue that Freetrade ought to have a specific plan or policy for these exact situations and if they do not intend to protect their customers against such situations, I feel they have to communicate these risks expressly and not shift the responsibility on its users.
I find the app itself to be very useful as a concept but I also have some concerns about the level of protection we have as customers. I fully appreciate that investing comes with inherent risk but the reality is we should never become forced sellers if there is a reasonable alternative and there usually is but may require some extra effort.
I hope Freetrade do find a way to protect their shareholders from forced selling and avoidable loss in this situation but if they don’t, I think we should be more critical about the platform we are using, rather than the company’s decision to delist. We should also recognise that our risk or not, we are consumers and they are the FCA regulated business providing access to an investment platform. Any company may decide to delist its shares but our contractual relationship is ultimately with the platform. And since these platforms are new it is yet to be decided what obligations they owe us as consumers.
Other than providing some kind of insurance plan in the future (or partnering to do so), there isn’t really a lot they can do.
As stated on the Freetrade landing page and throughout:
Freetrade does not provide investment advice and individual investors should make their own decisions or seek independent advice. The value of investments can go up as well as down and you may receive back less than your original investment.
Your capital may go to zero, and companies may delist, become acquired or merge, become bankrupt, or generally cease to exist. Those are the risks that we take when making the decision to convert our cash into stocks in a company.
Freetrade, as the broker, may facilitate our transactions, but it does not advise us and it cannot protect us against the decisions of the board of directors of said companies. Our own due diligence is our only defence.
I agree that there is an inherent risk in stocks, I wouldn’t suggest otherwise. However, there is definitely something that can be done here. One of the articles I saw about the Napster delisting says:
“Existing shareholders will receive one NM share for each Napster share they hold following a 750-into-1 share consolidation.”
Assuming the above is correct, this suggests to me that existing shareholders will receive something, provided there is a system in place to support this. We don’t know how much these shares will be worth but it seems to be this is something we as existing shareholders are entitled to, as it stems from our ownership of Napster shares.
And since we own the shares via the Freetrade platform, it is up to them to make this transaction possible and similarly it is up to them to say they won’t do anything about it and let us take a loss instead.
While not everyone will agree with me, I remain of the strong opinion that Freetrade must ensure that such events are duly supported, where doing so is reasonably easy/cheap to arrange and where not doing so will result in loss of rights and lead to avoidable losses to its core customers.
I would even assert that given what the nature of the platform and in light with the core principles of doing business as an FCA regulated entity, not having procedures in place to minimise avoidable losses in relatively normal corporate scenarios, would render the service unfit for purpose as it would add an additional and not necessarily transparent risk over and above the inherent risk of investing in stocks.
Freetrade have been great at supporting splits and transfers in the past. I don’t see what your worry is here.
I am glad to hear that, I know they support stock splits but I don’t think I have any experience with how they would support the type of transfer that is being proposed with Napster.
It appears they had no answer ready, when I asked the question what is happening shortly after the news came and I can see someone above asked them as well and did not receive clarity on the matter.
I also know for sure that they did not support Hammerson’s scrip dividend scheme, which resulted in users being unable to opt for the scrip option and reduced the return of such investors from 2p per share to 0.2 p per share, hence my anxiety on how they will approach this situation.
Freetrade don not currently support elective corporate actions like the script you mentioned. They do how ever support required corporate actions like dividends and stock splits. The onlyissue you may have is where they list these NM shares, if its on an exchange :freetrade: doms support you won’t be able to trade them.
The stock split is unlikely to be a problem. I’d worry more about the de-listing if it goes through since NM Inc isn’t expected to list until 2023
You can read the RNS here:
https://ir.q4europe.com/solutions/Napster/4092/newsArticle.aspx?storyid=15267400
Since NM Inc isn’t likely to list for a while, I’d pay particular attention to sections 6 through to section 9
I just sold my shares, I have been watching the bottom drop out and after some research decided to sell rather than lose any more money. There still on my watch list in case after the share holder meeting on the 20th doesn’t go their way.
Any chance someone could summarise the issue at hand for me? I’m an uncomfortably 86% down. Is it worth sticking it out? Or just sell and be done with this proven useless stock?
From my understanding, they are planning to delist from the LSE to get away from the current share price as it doesn’t represent the current company and product they are building correctly. They want it to be more in line with their peers.
They plan on converting 750 existing shares into 1 new consideration share in the private company going forward at a price of £7.50 a share (1p current share price). The company would then be private until they plan to list on the Nasdaq in 2023.
If you plan to keep your shares, they will be converted to the consideration shares but you won’t be able to sell them until they hopefully relist onto a market in 2023, that’s if they even do. So it’s a gamble, but a calculated gamble imo if you believe in the company and can hold.
Also if you currently hold the shares in an ISA, you can’t hold shares of a private company in an ISA, so Freetrade are still unsure of what they are doing with the situation yet but I’m hoping I can just transfer my new shares to my GIA until they relist.
Thank you mate that clears it up perfectly. Is that something they’re able to do then? Transferring from ISA to GIA? Hopefully something’s done or in the works.
Depends on the platform/broker and what they can/can’t do. I know other people on other platforms have been told they will be allowed to simply switch it over from ISA to GIA. Some have been told they have to sell from ISA and rebuy in GIA before conversion. So Freetrade are still deciding. I figure they are waiting for it to be official after the vote for it to go ahead at the General Meeting on the 20th and what it exactly entails, then the corporate actions team should be letting everyone know, from what I’ve been told by them.
Does anyone know what would happen about being in SIPP?