With company shares, you get voting rights, right? But did you know that the percentage of shares that you own determines the rights you have as a shareholder? Shareholders that own at least 5% of a UK company get better voting rights than those that own less than 5%, such as the ability to call a general meeting or apply to court to prevent it from being converted back into a private company. Investors also get more rights at other thresholds, like 10%, 15% and 25%.
For context, Tesco has more than 8 billion shares in issue (the number stood at 8,174,932,553 in 2017) so 5% of Tesco is around 408 million shares. At around £25 a pop, that’s around £10 billion.
It’s a little easier in the US, but even there you need to have invested at least $25,000 (about £18,000). For most of us, this is too much to ask. Tulipshare aims to let you make more use of your shareholder votes by pooling together its users to make up the minimum threshold. Read on to find out more about Tulipshare, including how it works, how much it costs and some pros and cons.
Tulipshare thinks that investors should be able to ask for ethical management of the companies that they invest in, so its created an investment platform that allows you to use your shareholder voting rights. It pools its users’ resources to participate in activism without individual investors having to invest tens of thousands of pounds in one company.
At the moment, Tulipshare is campaigning for three causes. It wants:
If any of its causes appeal to you, you can start investing with as little as £1. When enough people have invested in a cause to acquire voting rights as a company shareholder, Tulipshare will vote in the boardrooms on its users’ behalf.
Because a lot of day-to-day investors don’t own more than 4% of a company in the UK or $25,000 in the US, Tulipshare effectively pools together the investments of its users to break this minimum investment. It then votes on important issues, which are listed on its site.
Effectively, by investing in a specific goal, you are buying shares in the company so that Tulipshare can vote to make the change. This is pretty different from “typical” ethical investment strategies, where you invest in companies that are already doing great things. Instead, you’re buying your say to change the negative behaviours of companies.
Tulipshare is regulated in the UK by the FCA. In order to make use of your voting rights, you might have to appoint Tulipshare to act on your behalf.
Tulipshare charges transaction fees when you buy shares through its provider. It also charges a currency conversion fee when you put money in your account.
| Transaction amount | Fee |
|---|---|
| Up to $50 | 7% |
| $50 – $100 | 6% |
| $100 – $200 | 3% |
| $200 – $500 | 1.35% |
| $500 – $1,000 | 0.75% |
| $1,000 or more | 0.5% |
The currency conversion fee depends on the amount you want to convert, but does not go above 0.75%.
Tulipshare is still pretty new, so it’s probably a little early to say. It only has a few goals, so it wouldn’t really be used as an investment platform in the traditional sense. It has some great ideas and we look forward to seeing where it goes. The fees are a little high if you’re investing a small amount – for example, if you were to buy a share of Coca-Cola for around $57, you’d pay a $3.42 transaction fee (about £2.47) and around £0.30 in currency conversion fees for the trade. It’s certainly a different approach to ethical investing or impact investing which hopefully can make a difference.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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