anybody understand the 5.23:4 stock split and how it applies to CIG? What is the advantage to either the company or the investor to have these "special dividends"? I have held through 2012 and so got the 2012 also but with the stock price dropping it is just difficult to see how this benefits anybody? thanks in advance
If you research the structure of the ownership of the company, there are two types of shares. There are Regular Shares, and Preferred Shares. The symbol CIG is actually an ADR for the preferred share for CEMIG. The ADR for the regular stock is CIG-C but it has very low volume on the NYSE.
Reading through the details of the stock split, The new shares are being issued in Preferred shares for both classes. So this means there will be more Preferred shares relative to Common Stock. They claim this will increase the liquidity of the preferred.
If you look at the ownership of the Common Stock it is 52% owned by a Big Brazilean State and another 30% by a powerful Brazilian Family
two types nof splits, the one we had is reverse split. all splits do not change the investors value. r/s increase the share price but decrease the float. it is usually follow by a dulit selling shares. I personally dont see it as a positive move. it shows a chance where is sell shares to raise fund. I will continue to hold as I believe they are in strong position benefiting from brazil's growing economy
That is pretty much the opposite of what a stock split does... To the original poster, I have no idea what they are doing by splitting the stock when it is trading at 52 week lows. It's as if they are trying to drive the price down as low as possible. Personally I have bought in 3 separate times at what I believed to be the floor and I won't fall for it again. The dividends are just what the company does, it's troublesome for the long term growth prospects of the company.