PCRFY Stock: What to Know About the Panasonic ADR Termination

    Date:

    Over the weekend, shareholders of Panasonic (OTCMKTS:PCRFY) stock were surprised to see their shares disappear from their accounts. PCRFY stock is an American Depository Receipt (ADR), or a security that represents shares of a foreign company’s stock. The ADRs are issued by a U.S. depository bank, which in the case of Panasonic is JP Morgan Chase (NYSE:JPM).

    Panasonic signed a deposit agreement with JP Morgan in 2008. However, the Japanese technology company has asked JP Morgan to terminate the agreement, effective as of March 28. Panasonic’s ADR issuance books have already been closed, meaning that no further shares will be issued.

    PCRFY Stock: What to Know About the Panasonic ADR Termination

    According to JPMorgan, Panasonic’s American Depository Shares (ADS) cancellation books will remain open until “(i) March 28, 2024 or such later date as the Depositary opens an unsponsored American depositary receipt program in respect of the Company’s shares) or (ii) April 29, 2024 (to the extent the Depositary does not establish an unsponsored American depositary receipt program for the Company’s shares prior to such date).”

    JP Morgan can choose to take the path of an unsponsored ADR, which represent shares of a foreign company issued by a depository bank. These shares do not require the involvement or consent of the foreign company and trade on the over-the-counter market. JP Morgan noted that if it takes this path, it will make an announcement on or around April 1.

    If this happens, the remaining PCRFY stock shares under the deposit agreement will be transferred to a custodial account under the unsponsored ADR program on or around April 1. In addition, outstanding shares of PCRFY will be cancelled and be replaced with the new, unsponsored ADS.

    To sum it up, Panasonic’s cancellation books will stay open until March 28 or later if JP Morgan chooses to create an unsponsored ADR for Panasonic. As of now, the bank is eyeing April 1 as the date on which it will open an unsponsored ADR program. If the bank decides to not enact an unsponsored ADR program, the cancellation books will be closed on April 29.

    On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.  

    Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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