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Tellabs, Inc. Message Board

  • apdamic apdamic Dec 10, 2012 5:28 PM Flag

    Too many clueless people investing in TLAB for the wrong reason!!

    I don't know why so many new investors think they are going to make a killing on this special dividend? This dividend is being rewarded to long-time shareholders, like myself, who have likely purchased at much higher levels.

    This is a 25K bonus for me holding this stock through tough times, which hopefully will turn around in a year or two!

    It's not that difficult to understand. You CAN NOT purchase this stock and then sell it on the ex-dividend date thinking you're going to make $1 per share. I'm actually not happy that the stock's price isn't at the $2.75 - $2.95 levels, but I of course can hope that happens in the next trading session. I'm not holding my breath that it will though!

    It is very easy to understand. If you purchase and hold the stock through tomorrow's close, you will receive the $1.00 special dividend per share. Of course any shorts still holding the stock through tormorrow's close will need to pay that $1.00 special dividend price.

    I think there are too many new investors out there that do not realize that the stock's price will gap down $1.00 per share on Wednesday's open. You are not going to be able to sell this stock Thursday or Friday and get both the higher share price and the $1 dividend. That's not how this works!

    The new short-term investors are going to wake up Wednesday morning and realize that they really didn't make a single penny and are going to have a 15% tax liability for this year.

    Investors like me and TLAB themselves are going to wait for the downward selling pressure to purchase more shares. Of course I"m also hoping that the company will actually follow through with the buyback program this time. They said they would, but of course I've heard that story before. Regardless, they will wait for the lowest possilbe purchasing point and that could very well be under the $2 threshold.

    For those who think they are going to be able to both be able to sell this stock at current levels and receive the special dividend, without holding this stock through tomorrow's close, you are sadly mistaken!

    I still believe in this company, but I'm also still struggling with the decision if I want the special dividend or just purchase addition shares at lower prices, such at the company plans to do. Hopefully we will get a nice spike up tomorrow, which would help make my decision. If not though, I think I might be better off waiting and purchasing the stock at the $1 minus levels.

    I hope that the company does in fact buyback 22.5% of their shares this time or the share price could go south very quickly. I think they know that and will follow through with the buyback this time around. Hopefully good times ahead for long-term investors!

    Maybe I'll hold 10k of my 25k shares through tomorrow's close and receive the 10k special dividend and still have 36k plus, depending on tomorrow's price action, to repurchase shares at the lower levels.

    Thoughts from other long-term shareholders are appreciated! GLTA!!!!!

    Sentiment: Strong Buy

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    • Apd, your comment is interesting and raises some issues. I think you are right in the dividend gives most benefit to longs because of uncle sam. I will just ride it out with my current shares as I have been on board 3 years and down as far as can go and have liquidated most a while ago. If I had more, I would also ride it out Look at:

      " Dividends are classified either as ordinary dividends or as qualified dividends. Ordinary dividends are taxed at your ordinary tax rates for whatever tax bracket you are in. Qualified dividends are taxed at a 15% percent rate. To be eligible as a qualified dividend, the dividends must be from a domestic corporation or a qualifying foreign corporation and you must hold the stock "for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date." (Publication 550.)

      But mostly, I think it is a hold and maybe a buy after the drop in price as the company becomes very attractive to a buyer without having to deal with all of the cash asset in the price. What do you think about that notion?

      • 1 Reply to basin112
      • Basin112, It’s a very difficult situation because of the company’s past history in announcing buybacks and not following through with them. Of course there’s also the case that the company obviously wants to buyback their shares at the lowest price possible. If however, during the next earning’s call they don’t confirm that the buyback occurred, then I believe the stock will be punished even further.

        I just wish the price would be higher than current levels. I woke up this morning and saw how high the markets were and I was certain TLAB would have gapped up, but it hasn’t. I guess there are still the last 15-minutes of trading today, but I believe most of the shorts have covered by now. The one’s that haven’t covered are likely willing to pay the $1 dividend price and watch to see if the company actually proceeds with the buyback.

        There just seems to be too many people, especially on this board that don’t think we will drop by the full $1.00 dividend price and they are sadly mistaken. On your question, I believe that anyone that owns at today’s close will get the dividend.

        Somebody posted that their buddy mentioned that Whitman was purchasing this stock, which if true certainly would qualify as insider information, but I’m never privileged to that type of info. However, if they are the ones purchasing, I’m sure the company first assured them that they would follow through with their message, which said to aggressively buyback shares.

        Then you have the economy and the looming fiscal cliff. You get stories from both sides saying we will strike a deal because we have no other choice. Then you have others stated we will jump off the cliff united together and work from there. On top of that you have the fact that the Fed’s revolver is running low on silver bullets.

        So much to think about right now, but I know there’s going to be some very disappointed new shareholders that are going to drive this stock’s price down, once they figure out that they really aren’t making any money off this special dividend.

        I myself still have not decided if I will sell all my shares today to eliminate the tax burden and then repurchase shares at the much lower levels. To me, since I’m sticking with this company, I might just go that route, so that I have more shares to purchase between now and the actually dividend payout date of 12/21.

        It will all depend on the last 5-minutes of today’s trading, but I’ll most likely stick with my original plan which is to hold 10k shares and sell 15k and use those proceeds to purchase additional shares after tomorrow’s drop in share price.

        Disclaimer: I have 1 kid that just started college and the other starts next year. That is one of the reasons; I do not want a 25k dividend showing up on my tax return. That won’t help when applying for financial aid. The other problem I have is that I have long-term carry over losses that I’d prefer to off set with any gains and I can’t do that with this dividend.

        Best of Luck,
        Tony

        Sentiment: Strong Buy

    • Longs?

      If you take the dividend, you pay tax. If you sell now you get cap gain loss. Take dividend, sell next day, tax and more loss.

    • Excuse the above statement concerning the $2.75 - $2.95 levels. I of course meant to state $3.75 - $3.95 levels.

      I'm guess I'm still upset that I didn't have the available cash to average down, when the stock was trading in the $2.75 - $2.95 range prior to the special dividend annoucement!

      AGAIN - GLTA!!!

      Sentiment: Strong Buy

 
TLAB
2.440.00(0.00%)Dec 3 4:00 PMEST

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