Time to pull those Commonwealth Bank shares out of the bottom draw

The first shares in the Commonwealth Bank of Australia were sold by the Federal Government in 1991 when it released 30 per cent of the bank’s shares to the public at $5.40 a piece with a minimum number of 400 shares for a total of $2,160.

So called Mum and Dad investors flocked to take up this offering, so much so that the offering was heavily over-subscribed and this one sale of shares raised the Federal Government a massive $1.3 billion.

Two further releases of shares, held in 1993 and 1996, were just as strongly sort after.

Earlier in June, the share price for Commonwealth Bank shares reached a record high of $190.50 a share, which for anyone still holding their initial purchase of 400 shares, would value that shareholding at $76,200.

That’s a gain of $74,040 over 34 years plus dividends and franking credits that would have been paid during that time.

So, there will be a lot of Mums and Dads reading this who are very pleased that they bought their 400 shares in 1991, particularly if they have just sat on them and watched their value grow and grow.

However, many people who bought into these first and subsequent tranches of CBA’s shares bought the shares directly from the bank and effectively hold those shares in the ether. By that I mean, they have not transferred them to a trading platform where they can be bought and sold.

And of course, it is not just Commonwealth Bank shares that have this difficulty. There have been many shares over the years that have been issued by companies in much the same way such as Telstra and Medibank Private, to name just two.

I totally understand why people have done this because it can be very challenging to move shares bought directly from a listed company onto a platform, where they can be sold.

My warning though to anyone holding shares like this is to contact me urgently about moving their CBA share holding onto a platform. That while you may have no intention of selling these shares anytime soon, they will eventually need to be moved onto a platform either to be sold or inherited by your children

In fact, the sooner you do move them the better. If you should become incapacitated or die before you move them, you are leaving a nightmare for whoever is looking after and inheriting your estate.

In fact, it is so difficult to transfer shares like this once you are no longer around to deal with them yourself and help those who are trying to transfer them to a trading platform, that I would not be involved in attempting to move them at all.

So, while it’s fantastic to have some Commonwealth Bank shares slowly burning away in your bottom drawer and steadily appreciating value, take a moment to think about this.

If they are not on a platform already where they can be bought and sold, you should take steps to move them today. That you should do so urgently.