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What to do when your private stock goes public?

If a private stock in your AET account has gone public through an IPO, direct listing, or SPAC merger, follow this guide to update your account.

Summary

When a private holding becomes publicly traded, submit a Letter of Explanation through the User Portal under Asset Review. AET cannot continue to custody publicly traded securities, so you'll need to transfer, distribute, or liquidate the shares. Before taking action, verify whether your shares have any sale restrictions.

 

Important: Check for Stock Restrictions

Before taking any action, verify whether your shares have restrictions that may limit when or how much you can sell:

  • Lock-up period – You may not be able to sell immediately after the IPO
  • Affiliate restrictions – If you hold more than 10% of the company, or are an officer or director
  • Volume limitations – You may only be able to sell a certain number of shares at a time

Contact the transfer agent or review your original offering documents to confirm your restrictions.

 

What You Need to Provide

Submit the following information to AET:

  • CUSIP number
  • Stock ticker symbol and exchange
  • Effective date of public trading
  • Transfer agent name and contact information
  • Number of shares held

How to Submit

  1. Log into your AET User Platform account
  2. Navigate to the Documents section
  3. Submit a Letter of Explanation with type Asset Review
  4. Include all required information listed above

 

Your Options for the Shares

Once your submission is reviewed, you have three options:

Option 1: Transfer to Another Custodian

Transfer your shares to a brokerage that can hold publicly traded securities via a trustee-to-trustee transfer (no tax reporting required).

Process:

  1. Obtain a transfer form from the receiving custodian
  2. AET will obtain the certificate and Stock Power Authorization form from the transfer agent
  3. AET will sign the transfer documents and send to the new custodian
  4. The new custodian will coordinate with the transfer agent to complete the transfer

Note: Many companies have already moved paper certificates to the transfer agent in book (digital) form under "AET FBO [Client Name]." Companies may not be aware that IRAs require a specific transfer process—please notify AET as early as possible.

Option 2: Take an In-Kind Distribution

Receive the shares directly in your personal name at current fair market value.

Process:

  1. Complete a Direction of Investment (DOI) withdrawal form with the asset listed
  2. AET will obtain a Stock Power Authorization form from the transfer agent
  3. Shares will be transferred to your personal brokerage account

Tax Implications:

  • Traditional IRA: Taxed as ordinary income at distribution; future gains taxed separately when sold
  • Roth IRA: Tax-free if qualified distribution

AET will issue a 1099-R for tax reporting purposes.

Option 3: Sell the Shares

Instruct AET to liquidate your shares. Cash proceeds return to your IRA and remain tax-deferred.

Process:

  1. Submit a Signing Request through the portal
  2. Complete a Stock Power Authorization form
  3. If paper stock exists, it must be submitted to the transfer agent to convert to book form before sale
  4. The Stock Power Authorization form requires a Medallion Signature Guarantee

 

Important Information

  • Timely action required: AET cannot hold publicly traded securities, so disposition must occur promptly after the stock goes public
  • Do not move shares independently: All share transfers must be coordinated through AET. Moving shares without AET authorization may result in the transaction being treated as a taxable distribution
  • Transfer agent coordination: AET will work directly with the transfer agent on your behalf once you've submitted your direction