KMP and The Reorganization


I think this picture describes how I feel about the transaction!

I have a few accounts that have a few shares in each account. They were picked up over time with a dividend reinvestment in order to start building a position. At $60.00 or more a share, quite a lot of dividends were needed to buy those shares. My kids have 1 share each and so on and so forth. However, today, I got an email saying it will cost each account a $25.00 reorganization fee. Wow! Seems like the company ought to be responsible for that fee since they are taking my shares- I am not just getting rid of them. I have no choice. I guess the best method will be to sell the share or shares and pay the trade since it will save almost $18.00 in each account. The little guy never wins when it comes to business deals. There is always a catch or some kind of small print that burns the average guy. So, this kind of puts me off on the building a position with very small purchases. I had some reservations to buying the single shares, but I figured over time they might have a whole bunch of shares. Guess I should have gone with the KMI as the original purchase. All of that considered still doesn’t come close to the tax issues I am going to have with the conversion or sale my bigger position of KMP that I have been having for a few years now. With the reduced cost basis, it is going to be something I did not plan on having to deal with. My plan was to just let it pass to my kids when I passed on eventually. I guess that was a waste of time to plan for. The best part is that the major number of shares is held in 2 open accounts ( one for each kid in the future) with an equal number of shares in each and each account has to pay a fee. Talk about a raw deal. When I heard about the reorganization, I knew I should have sold when the stock popped that first day or so. However, I did not know the whole story and really still don’t know everything that is going on. I do know that if you do not own KMI already, the deal will not be as spectacular for the little shareholder as it was first set out. So does anyone have this same issue? How do you feel about it?

About dividenddreamer

Doing what I can to make the best of today and the most of tomorrow.
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3 Responses to KMP and The Reorganization

  1. I have a similar issue with my son’s money.

    He’s interested in stocks and I would like to be able to build him a small porfolio so he could play around and learn but I haven’t found an effective way for him to hold a small amount of shares without getting destroyed by fees.

    Like you said, the little guy never wins.

    Keep up the good work on the blog

    • I am trying to stay with the stalwarts when it comes to the kids investments. It is better to have a really reliable return and a company that is pretty much rock solid because they have such a long time horizon. As far as the KMP goes, I went with it because of yield. I should have stayed put and reinvested the dividends in the same companies that were paying them. Good luck and thanks for stopping by.

      Keep cranking,

      Robert the DividendDreamer

  2. TwoInvesting says:


    Not sure if you’re still around to see this message, but there are now a number of excellent options for your son. Both Loyal3 and Robinhood have commission free trades. You can purchase specific dollar amounts with Loyal3 (and receive partial shares), while with Robinhood you can only buy whole shares but the commissions are free.

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