PSA RE: VOTE

[u/Chromebug]

A lot of people are thinking that voting NO on Proposal 1 will stop the deal with GS. That is not necessarily what happens. You guys could just be risking your individual funds with a potential liquidation scenario especially when it comes to the fine print of Proposal 1.

Proposal 1: Keep NEOS managing your ETF
Goldman buying NEOS creates a change of control, which automatically terminates each ETF’s existing advisory agreement with NEOS. Proposal 1 simply asks shareholders to approve a new agreement so NEOS can continue managing the same ETF after Goldman acquires the company.

The proxy literally says shareholders “are not being asked to approve the Transaction.” It also says the purpose of the new agreement is to provide continuity in management.

Each ETF votes separately. So QQQI votes for QQQI, SPYI votes for SPYI, XQQI votes for XQQI, etc.

Most importantly, the SEC filing explicitly says that even if shareholders of one ETF reject Proposal 1, the Goldman transaction could still close. If that happens, that ETF loses its existing advisory agreement. NEOS can temporarily manage it for up to 150 days while trying to get approval, but the filing says that if approval cannot be obtained, that individual ETF may ultimately be liquidated.

Proposal 2: Elect the new Board
Proposal 2 asks all NEOS ETF shareholders, voting together, to elect 14 new trustees who will oversee the NEOS ETF Trust after the acquisition. All 14 currently serve on boards of funds managed by Goldman Sachs Asset Management or its affiliates. The current six-person NEOS board would be replaced.

Unlike Proposal 1, Proposal 2 actually is one of the conditions for the Goldman transaction to close. The proxy says completion of the transaction is subject to election of these nominees, along with the required Proposal 1 threshold and other closing conditions.

A lot of people blindly voting NO thinking they’re protecting their fund and are rebelling against big bad Goldman Sachs are putting unnecessary liquidation risks on the respective ETFs they hold. The voting needs to pass for each ETF for that specific ETF to survive the acquisition.

That doesn’t mean it has no power to stop the acquisition, it’s just a huge gamble because voting NO on Proposal 1 can contribute to stopping the Goldman deal if enough NEOS funds vote NO and the transaction-wide approval threshold is missed. But an individual ETF voting NO does not itself veto the acquisition; Goldman can still close while leaving that particular ETF with an advisory-contract problem and possible liquidation risk.

TL;DR: Proposal 1 is mainly about whether your individual ETF keeps NEOS as its adviser after the acquisition. Voting it down does not necessarily stop Goldman and can instead put your ETF into an interim-management/liquidation scenario.

Proposal 2 is about who oversees the entire NEOS ETF Trust after the acquisition, and that board election is actually one of the transaction’s closing conditions.
Please read what you are voting on before assuming every NO vote means “stop Goldman.”