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Emmis Communications Corp. Message Board

  • escazicr5633 escazicr5633 Nov 9, 2006 10:17 AM Flag

    Got the answer--Ex div, Record, etc.

    Just spoke to Ameritrade who researched this. If you own the stock before the ex-div date, Nov. 22, you get the dividend. If you own the stock and then sell it before the ex-div date, you do not get the dividend, the person you sell it to gets it.

    Apparently you do not have to own the stock by the record date to get the dividend. It is very confusing because there are different rules for a special dividend.

    Also, the stock and all options will adjust by the dividend amount on the day the dividend is paid, which is supposed to be TWO DAYS BEFORE THE EX-DIV DATE, OR NOV. 20TH!

    Perhaps someone else can confirm all this with another large brokerage house. A regular broker may not know how this works - so we need someone really knowledgable.

    I bought EMMS on Nov 8th, but the settlement date is Nov 13th, which is one day AFTER the record date. I was told I would get the dividend anyway.

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    • I just spoke to another person at Waterhouse who seems quite knowledgeable and was told again that I would be entitled to the dividend even tho the settlement date for my stock was one day after the record date. (I do not know the point of having a record date in this case.)

      If a person has sold Nov calls against the stock, and has also bought Nov calls and Dec puts (as suggested per an earlier post) they need to keep in mind the Nov calls expire on the 18th, but the ex-div date is the 24th. On the 24th the stock price adjusts but, since the Nov calls expire before then, they will not adjust. The Dec put, however, will be adjusted in one of two ways, to be determined when it expires.

      This is just to provide additional information

    • The Important Dates of a Dividend
      There are four major dates in the process of a company paying dividends:

      Declaration date� This is the date on which the board of directors announces to shareholders and the market as a whole that the company will pay a dividend.

      Ex-date or Ex-dividend date� On (or after) this date the security trades without its dividend. If you buy a dividend paying stock one day before the ex-dividend you will still get the dividend, but if you buy on the ex-dividend date, you won't get the dividend. Conversely, if you want to sell a stock and still receive a dividend that has been declared you need to sell on (or after) the ex-dividend day. The ex-date is the second business day before the date of record.

      Date of record� This is the date on which the company looks at its records to see who the shareholders of the company are. An investor must be listed as a holder of record to ensure the right of a dividend payout.

      Date of payment (payable date) � This is the date the company mails out the dividend to the holder of record. This date is generally a week or more after the date of record so that the company has sufficient time to ensure that it accurately pays all those who are entitled

      Today is the ex-date so if you buy the stock today you don't get the dividen.

    • Maybe you're missing the point.

      If buyers believe that the stock they buy on Monday the 13th is being sold without the right to the dividend, they will pay less for the stock, whether their understanding of the dividend date is right or wrong. MMs only move the price down if there are no bids above the price they think is fair. The can only keep the price high, in the absence of bids, by themselves buying shares offered for sale at higher prices. They don't just publish a price at which you can buy or sell unless they are willing to be on the other side of the transaction.

    • You wont get a penny no matter what you do from the dividend.


      Read this post from the IR department.


      Economic theory states that when a company delivers a special dividend,
      its stock price declines on the ex-dividend date to reflect the payment
      of the dividend.
      While the record date for Emmis' special $4 dividend is Nov. 12, if you
      sell your stock after this date but before the ex-dividend date (Friday,
      Nov. 24) the $4 check would be attached to the stock; that is, it would
      go to whoever you sell the stock to. You need to hold the stock through
      the ex-div date to receive the $4 check. Of course, on the ex-div date,
      the market will adjust the share price accordingly.
      I'm not sure what controversy you are talking about - I think it is
      pretty straight forward. Please let me know what additional questions
      you have. - Kate, Emmis Investor Relations

    • CORRECTION. The payment date is Nov. 22, the ex-div date is Nov. 24. This makes no sense, but this is what I am told.

      • 1 Reply to escazicr5633
      • I have checked with two large broker houses and have also been told they have researched the EMMS dividend rules due to the large call volume over the past two days. They both confirm the record date does not affect your eligibility for the dividend, as long as you own it before the ex-div date, the 24th. They warned the stock will be adjusted by $4.00 on that date at opening bell and any after hours trading will be suspended for this reason. Price Waterhouse seemed to think that the stock would be adjusted by the $4 div rate on the payable date, the 22nd, but the other two brokers state this is not possible as NASDAQ has set the ex-div date as the 24th. Their opinion was that the ex-div date should really have been set to the 22nd but nevertheless, this was the purpose of the ex-div date, all stock and associated options are adjusted on this date. I don't understand the confusion, even EMMS investor relations is confirming the stock must be held on the 24th in order to get the dividend, I am assuming they would know their own rules.

 
EMMS
2.04-0.04(-1.92%)Jan 23 4:00 PMEST

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