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American International Group, Inc. Message Board

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  • cwn600 cwn600 Jan 14, 2011 1:57 AM Flag

    Clarification: As long as you buy on or before the 19th, you get the warrants

    "Are you saying the second paragraph in this newswire article is inaccurate?"

    Technically, it is accurate, but in practical terms it's completely misleading. Technically, the company does indeed pay the dividend to all shareholders of record. But, because of the deferred ex-date being on the 20th, a full week after the record date, the due bill process then takes the dividend back from shareholders of record who sold before the ex-date and transfers it to the shareholders who bought after the record date and held the stock at the close of trading on the 19th. The due bill process is handled by the brokerage houses. The company does not participate in the due bill process.

    So technically, they do indeed pay all shareholders of record but effectively that's not what the end result is.

    It is always the ex-date that determines who gets the dividend, not the record date. In cases like this one of a deferred ex-date, the payment process is plenty screwy but it is still the ex-date that prevails.

    And the due bill process of taking back the distribution from those who sold before the 20th takes a couple days, so won't happen right away.

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