I am curious, what brokerage house have not post dividends to your account yet? So far, i noted e-trade and schwab from several postings. Anyone else whose brokerage have not paid?
Have you reinvested in more SPPI shares? I hope those that did not want the dividend in the first place would buy more shares. Increasing your ownership interest is similiar to reducing the float to be shorted.
How was the dividend posted to your account? Was it a qualified dividend to be taxed at a lower rate or is it interest income? You made a comment previously that the shorts who borrowed your shares will pay a gross up dividend to cover the tax liability? Is that true? How do you know? The 10% interest on the borrowed shares should be tax as interest income. Not sure why the dividend payment from the shorts will be grossed up. Can you explain further?
The shares I have loaned out are all in IRA accounts (Regular IRA and ROTH). The payment ("dividend") was posted Friday morning by 9:30am ET. While I have small positions in SPPI in a taxable account, I've elected not to include them in the loan program. The reason why shorts have to gross up payment to taxable accounts is because the payment is not treated as a qualified dividend. Whoever the short sold the borrowed shares to gets the dividend from Spectrum. My position is not technically a long position but an obligation of Fidelity (they look to the short for performance) to provide the stock back into my account if and when I decide I want the stock back - to sell or vote or whatever. Therefore in a taxable account the payment from the short is taxed as ordinary income and the 31% gross up is to compensate for the difference in tax treatment. Fidelity told me that's how it would work in the taxable account.
I'm sure you know that dividends in a Regular IRA are taxed as ordinary income at the time of distribution of proceeds in the IRA account. Dividends (as well as interest payments from the shorts) in a ROTH account are not taxed upon distribution of proceeds in the ROTH. So there is no gross-up for IRA accounts.