The most widely held stock is ...
© St. Petersburg Times, published October 22, 2000
Without most of us even noticing, AT&T Corp. has been dethroned as the most widely held stock in America. The new No. 1: MetLife Inc., which went public in April and immediately had twice the number of registered shareholders.
But the title of most widely held doesn't carry the same prestige it once did. That's because changes in the way Americans hold stocks have made it impossible for public companies to know for sure how many shareholders they really have.
MetLife, the New York insurance and financial services giant, leapt to the top of the charts because of the way it went public.
Formerly a mutual insurance company, MetLife offered its policyholder owners their choice of cash or shares of stock when it converted to a shareholder-owned company. Of the 11.1-million who were eligible, 8.6-million took stock and became MetLife's shareholder base. MetLife also has about 200,000 other shareholders who bought stock through the public offering.
MetLife has a fairly good grasp of its shareholder numbers because it just went through the conversion process, and policyholders were required to keep their shares in a special trust for the first year. For the rest of the corporate world, the facts of shareholder life are much different.
"The manner in which shares are held has totally changed," said Howard Silverblatt, editor of quantitative services at Standard & Poor's Corp. in New York, which tries to track shareholder numbers.
The job was easy when nearly all investors held paper certificates registered in their own names and stashed in a safe deposit box. But now vast numbers hold their shares through brokerage accounts, trust accounts and other third parties.
It's "Merrill Lynch" or "Raymond James Trust Co." that shows up on the company's books as the shareholder, not the individual investor.
Most people who keep their shares in a brokerage account, known as holding a stock in "street name," do it for convenience. There is less paperwork and no risk of a certificate being lost or stolen. Privacy is a side benefit. The company whose shares they own never finds out their names unless the investors sign paperwork agreeing to the disclosure, which most are never asked to do.
Silverblatt said no one has been tracking overall growth of street name holdings. But individual companies that have studied the issue have found huge increases.
"Many companies have seen doubling, tripling and even quadrupling in the past five years in the number of their street name accounts," said John C. Wilcox, vice chairman of Georgeson Shareholder Communications in New York, which helps companies solicit shareholder votes.
Most technology companies -- including big names such as Microsoft Corp., Intel Corp. and Cisco Systems -- do not even show up on the list of most widely held companies because their ownership is so concentrated in street name holdings.
With the notable exception of America Online Inc., the list of the most widely held is dominated by long-established companies. AT&T Corp. and its spinoffs, such as Lucent Technologies and the Baby Bell companies, have reigned supreme for years.
The change in the way shares are held presents a bigger challenge than just figuring out which stocks are most widely held.
Communicating with street name shareholders is more time-consuming and expensive. Mailings go out to shareholders through an intermediary, and the votes from shareholders have to be collected the same way.
Even though brokerage houses tell a company how many proxy statements or annual reports it needs for its street name accounts, the numbers are not complete because investors who assign their voting rights to a trustee do not receive the mailings.
"We have conflicting regulatory objectives," said Wilcox of Georgeson Shareholder Communications. "One is to maximize disclosure, compelling the corporation to get information and disclosures out to shareholders, and the other is to allow shareholders to keep their identities secret if they choose to."
Owning stock through a mutual fund puts another layer between a company and its ultimate shareholders.
But even as the numbers have become more difficult to collect, stocks have become America's favorite investment, more widely owned than ever. Including investors in mutual funds and retirement savings plans, about 70-million Americans owned stock in 1995, up from 52-million in 1989, according to the New York Stock Exchange. That number is now thought to be approaching 90-million.
"Twenty years ago, if you owned stock, you had to be at least middle to upper middle class or higher," Silverblatt said. "Not anymore."
Most widely held stocks
Here is a list of the 25 most popular U.S. companies, based on the number of registered shareholders. The numbers do not include millions of investors who hold their shares in brokerage or bank trust accounts, which shield their identity.
1. MetLife Inc. -- 8,800,000
2. AT&T Corp. -- 4,206,319
3. America Online -- 1,924,600
4. Lucent Technologies -- 1,677,810
5. Verizon Communications -- 1,440,811
6. SBC Communications -- 1,038,807
7. BellSouth Corp. -- 944,285
8. John Hancock Financial -- 918,551
9. McDonald's Corp. -- 899,100
10. Walt Disney Co. -- 842,000
11. Exxon Mobil Corp. -- 778,644
12. IBM Corp. -- 646,147
13. Mony Group -- 606,753
14. Qwest Communications -- 567,293
15. General Electric -- 557,000
16. General Motors -- 499,809
17. Delphi Automotive Systems -- 462,357
18. Lockheed Martin Corp. -- 398,165
19. Coca-Cola Co. -- 394,603
20. Fannie Mae -- 378,000
21. Wal-Mart Stores Inc. -- 341,000
22. NCR Corp. -- 330,000
23. Limited Inc. -- 310,500
24. Raytheon Co./B -- 282,698
25. Merck & Co. -- 280,500
- Source: Standard & Poor's Corp., companies
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