Direct Stock-Purchase Program

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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.
References in periodicals archive ?
Somewhat surprisingly, Web sites were mentioned most often, followed by investor relation departments, DRIPs, public relations departments, direct stock purchase programs, NAIC events and publications (the NAIC, or National Association of Investors Corporation, provides investment education for individuals and investment clubs), and toll-free investor access.
accomplish their goals and best serve those individuals: (1) build a strong investor relations department; (2) create, maintain, and continually update an informative Web site; (3) perform regular visits to investment clubs; (4) advertise through various media; (5) offer DRIP and direct stock purchase programs; and (6) continually search for creative means to communicate their story to existing and prospective investors.
Major Types of Efforts Made to Attract Individual Investors Number Percentage Mentioning Mentioning Effort to Attract Individual Investors Effort Effort Web site 53 87% Investor relations departments 47 77% Dividend-reinvestment plans (DRIPs) 40 66% Public relations departments 32 52% Direct stock purchase programs 24 39% NAIC events and publications 11 18% Toll-free investor access 10 16%