Direct Stock-Purchase Program

Direct Stock-Purchase Program

A plan in which a publicly-traded company allows an investor to buy stock directly from the company rather than through a broker-dealer. Some companies offer direct stock purchase plans to raise financing at less expense to the investor (mainly through not charging commissions or fees). Some advisers recommend that first-time investors use direct stock purchase plans because of the reduced cost. It should not be confused with an employee stock option plan because direct stock purchase plans are open to anyone.
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Plenum has also become a corporate member of the National Association of Investors Corporation (NAIC) and has tailored a subset of the public direct stock-purchase program to qualify for NAIC's Low Cost Investment Plan which will be available only to the approximately 750,000 NAIC members.
Offering a direct stock-purchase program may get investors to sit up and take notice, but don't forget to count in the cost of additional shareholders.
These direct stock-purchase programs are enhanced versions of dividend reinvestment plans or DRIPs.