I have US 'VOLKSWAGEN AG-SPONSORED ADR REPSTG ORD DM 50 PAR' Volkswagen ADR shares. Volkswagen has ended the ADR, and I have these Volkswagen ADR shares. I am residing in the USA. How can I convert these shares to regular Volkswagen AG shares on a German exchange from the USA? I understand its a 5:1 conversion to regular shares. I would like to continue a 'long' position with Volkswagen and hold the German shares, rather than a unsponsored US program. Not sure how to go about the transaction. Thank you in advance.
I encountered the VLKPY ADR termination too. This is definitely an annoyance with ADRs.
Owning German shares is easier than you think, but also costs more than you think. The biggest problem is currency exchange fees. Unless you already own Euros and your broker offers multi-currency deposits, you’ll spend 0.3% to 1% of your trade’s dollar value to convert from USD to EUR. This will be the bulk of your fees. Here are the exact fee calculations. To do this, just call your broker and enable international trading.
Here's what I did to convert to the new unsponsored ADRs:
- Volkswagen stopped officially sponsoring this ADR.
- The depositary bank, JP Morgan Chase, sent me this official termination
announcement. It offered me 2 options and gave me 6 months to take
one of these actions:
- Convert the ADRs to a new unsponsored ADR VWAPY based on the value at the time of termination. “Unsponsored” means the bank believes there’s still demand for Volkswagen’s stock in the U.S. and is willing to buy a bunch to sell them to you without Volkswagen’s involvement. They’ll even waive the termination fees.
- Do nothing. The bank will sell the underlying Volkswagen stock. You then have to request the money. You’ll have to pay termination fees, but they seem reasonable for the access to international stocks you get.
- I chose to convert and it took 4 days. Good news is that your broker will take care it for you - just call them and tell them what you’d like to do. You don’t even need to fill out the conversion form.
Here's more from my research on the various ways of trading international stock.