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Gyrodyne Co. of America Inc. Message Board

  • sandlowt sandlowt Oct 30, 2013 10:09 AM Flag

    Ex-date vs Record Date

    I am confused. Per the proxy and numerous announcements, the Record Date for the Special Dividend is Nov 1. That would make today, 10/30, the ex-dividend date. However, the stock is certainly not trading at a price that reflects the ex-date. Does anyone have an explanation?

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    • see special rules for 25%+ divs -To be entitled to a special dividend of less than 25%, you need to be a stockholder on the record date. To be a stockholder on the record date, your purchase would need to have been made a minimum of three business days prior to the record date. The ex-dividend date, i.e. the first date in which a new buyer of shares would not be entitled to the dividend, is two business days prior to the record date (see ex-dividend date for exceptions).
      In the case of a special dividend of 25% or more, special rules apply. If you sell stock after the record date but before the ex-dividend date, your shares will be sold with a book entry sometimes called a "due bill," which denotes that though the company will pay the dividend to your account (as the shareholder of record), your account must, in turn, turn that dividend over to the buyer of your stock. Conversely, if you buy stock after the record date but before the ex-dividend date of a large special dividend, you are entitled to the dividend and will receive it via the due bill process.

    • "Per the proxy and numerous announcements, the Record Date for the Special Dividend is Nov 1."

      Yes.

      "That would make today, 10/30, the ex-dividend date."

      No, it wouldn't.

      "However, the stock is certainly not trading at a price that reflects the ex-date."

      No, it isn't, and that's because the ex-date is December 31st, not October 30th. Because of the size of the distribution relative to the stock price, this distribution does not follow normal dividend rules. The company made note of that fact in their announcement of the distribution: "The dividend is payable on December 30, 2013 to shareholders of record as of November 1, 2013. ... As required by NASDAQ rules governing special dividends of this magnitude, the ex-dividend date will be set one business day following the payment date."

 
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