/biz/ - Business & Finance

Unconfirmed reports that Fidelity cancelled the shares due to Rule 302.

Rule 302 states:

302(a)General rule

If a corporation redeems its stock (within the meaning of section 317(b)), and if paragraph (1), (2), (3), (4), or (5) of subsection (b) applies, such redemption shall be treated as a distribution in part or full payment in exchange for the stock.

Rule 302 is an IRC code for Distributions in redemption of stock pursuant to rule IRC 317(b), which states:

For purposes of this part, stock shall be treated as redeemed by a corporation if the corporation acquires its stock from a shareholder in exchange for property, whether or not the stock so acquired is cancelled, retired, or held as treasury stock.

Sounds familiar?

Edit: unconfirmed report found here: https://www.reddit.com/r/ThePPShow/comments/17eqs0z/it_happened_to_me_too_while_i_was_in_the_middle/

If true, 302(b) applies as

(b)Redemptions treated as exchanges

(1)Redemptions not equivalent to dividends

Subsection (a) shall apply if the redemption is not essentially equivalent to a dividend.

If the reports are true, then it will be an exchange of securities, as our shares were cancelled pursuant to section 317(b), and it will be as a distribution and not a dividend.