Over The Counter Stocks

Laurie Frederiksen on

Some stocks are not sold on the regular exchanges. They are are sold "Over the Counter". Pricing information for them can be sketchy to get. They may be very thinly traded. There may be days or weeks between trades. This means their value at any point in time may or may not be related to the price they sold at most recently.

The problem with owning these in a club is that your club accounting is based on the daily updating of the Valuation of all your assets. If the pricing for an Over the Counter stock is out of date, your club valuation (based on the latest available but stale pricing) will not be a good representation of your clubs total asset value. Member payments will not really be correctly accounted for and if you have any withdrawals, the amount shown in bivio may not be a good representation of what your club and each members account is really worth.

A club asked today about an Over The Counter (OTC) stock, RCCB. This might appear to be a fun stock to own. It represents shares in the Rochester Community Baseball Team, the Rochester RedWings. However, if you look at its one year price chart, you will see some of the problems your club would be facing with valuation if you owned it as a club:

So trade the shares of the Over The Counter stocks in your personal portfolios or on paper, not in your clubs. That way you'll know whether or not your club has hotdog money when you get ready to plan your Fourth of July Celebration!

Laurie Frederiksen
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