Well, CSAL is going to start trading on a when-issued basis on Monday, so its price will be established then. The when-issued trading symbol is CSALV. The symbol will change to CSAL the following Monday.
"I''ll stick closer to WIN's estimates on their website: $43 for WIN and $43 for CSAL. ... Go to windstream website, click investor relations, click reit, click update on reit spinoff, click investor presentation ... page 7"
You mean where it says Indicative Share Price 7.32 for WIN and 8.64 for CSAL?
43 doesn't appear anywhere in that document.
To be more accurate, you need to add the following to your post:
Any shareholders of record as of the distribution record date who sell their WIN shares before the ex-date, April 27, will also be selling their right to the distribution. Buyers of WIN shares beginning two days before the record date through the distribution date will receive the distribution not on the distribution date but on the due bill settlement date.
"I think the ex-dividend date (which is indicated as coming after the record date) is also a key date."
All the speculation of who gets the spinoff is based on the company's copy and paste of the general spinoff procedure from the SEC website. IR clearly doesn't understand the procedure. In addition to their own confusion, they're overlooking the fact that distributions with a value of less than one penny usually don't have an ex-date. That leaves the shareholders of record as of the record date as the recipients of the distribution. (When a company's distribution has no official ex-date, the effective ex-date is the same as for normal distributions, two days before the record date. The only difference being that the company's stock price is not reduced by the value of the distribution.)
To clear up how a spinoff usually works, the distribution is paid by the company to all shareholders of record. But all shares traded beginning two days before the record date through the distribution date are sold with due bills attached that require the seller to forward the distribution to the buyer of the shares. That makes the first business day after the distribution date the ex-date. Because the distribution is paid first to all shareholders of record on the distribution date, it takes time for it to be transferred to those who are owed it via the due bills. The shareholders who qualify for the dividends via the due bills are paid the distribution on the due bill settlement date, not the distribution date. The company plays no part in the due bill process; its participation ends with paying the distribution to the shareholders of record as of the record date. The due bill process is handled entirely by the brokerage houses. It is a complication for the brokerage houses that is unlikely to be used on a sub-penny stock, never mind a sub-penny distribution.
1. "are we getting the shares from the spinoff since we held through the 10th?"
April 10th has nothing to do with who gets the spinoff. Whoever holds WIN at the close od trading on April 24 gets the spinoff. Those who were shareholders of record will receive them on the 24th; those who bought WIN from April 7 through April 24 will get the spinoff shares on the due bill settlement date.
2. "what happens if you buy more now... will WIN give you spinoff shares for that?"
If you hold the shares at the close of trading on the 24th, yes. If you sell before the close on the 24th, no.
"If you have 1000 shares of win and the spin off closing price is $8.00 per share you would end up with 200 shares of csal at $40.00/share"
The value of CSAL will be determined in when-issued trading before the deal closes. For purposes of example, let's use $36.00 instead.
"Now add to that the win stock which will reverse split leaving you with 166 shares @ $8.00/ share or $1,328.00 in total equity"
If CSAL closes at $36.00 on April 24 and WIN closes at $8 on April 24, then the reverse split WIN will open around $4.80, as 20% of the closing price of CSAL will be deducted from the closing price of WIN to account for the reduction in value of WIN by spinning off CSAL. 20% of 36 is 7.20. Subtracting 7.20 from each pre-split share of Win puts it at 80 cents, so post-reverse split would put it at $4.80. 166 post-split shares times $4.80 is $796.80.
"When you consider the $1,328.00 in additional equity you pick up the first year"
The value of WIN at the close of trading on April 24 will be split proportionally between WIN and CSAL on April 27. You don't gain anything.
"No. The record and ex dates mean nothing in this case."
The ex-date is quite functional for this dividend. It is April 27.
"After those dates, WIN still trades as the original shares but changed into the package which is the new WIN plus the new REIT"
Wrong again. But at least you're consistent. While the record date has passed, the ex-date has not. With spinoffs and large cash dividends, the ex-date is the fist business day after the distribution date. That's why the ex-date for this distribution of spinoff shares and prorated cash dividend is April 27. The shares trading today are the very same shares that were trading before the record date. The due bills merely require the owner of record to forward the distribution to whoever he sold them to.
You obviously believe the ex-date has passed, apparently thinking that it was two days before the record date, as with normal dividends. There are many sources of the correct information and you'd do yourself a favor to study them and understand how it really works. Here are a couple to start with:
The SEC website. Under "Ex-Dividend Dates" it says, "Sometimes a company pays a dividend in the form of stock rather than cash. The stock dividend may be additional shares in the company or in a subsidiary being spun off. The procedures for stock dividends may be different from cash dividends. The ex-dividend date is set the first business day after the stock dividend is paid (and is also after the record date)."
The website "Understanding Dividend Dates" says that for stock dividends, spinoffs and extra large cash dividends, the ex-date "occurs not before the record date, but after. In fact, the ex-dividend date is not even before the payment date! By rule, the ex-dividend date is one business day after the payment date."
As with any distribution, the ex-date for this one is very meaningful. That you refuse to understand it is not.
"people do not understand the value of the spinoffs and are confused by the ex-dividend date (which is irrelevant in this case)"
The ex-date is not irrelevant. It's the only date that determines who gets the spinoff and who doesn't. Perhaps you're thinking of the record date.
"I think that means is you need to buy them on the 10th and hold unto spinoff. Anyone else buying them after the 10th will just simply get cashed out."
No, it works the way I've described earlier in this thread. It's the way spinoff have worked for decades. Nothing new or unusual about it. If you do a search for "understanding dividend dates" and click on the top return, then scroll down to "Dividends of 25% or More of a Company's Stock Price" it clearly explains the due bill process that applies to this spinoff.
I don't see how it could possibly be understood, considering that it's incomplete. Without key details, it's just a confusing mess. But it's no different than the communications of the majority of companies in the same situation. They issue the least information they're required to but it sure would help those who've never seen this situation to have more of an explanation.
"You should inform the company because if what you said was true, they just set themselves up for one heck of a lawsuit sending that letter."
Really? A lawsuit? Are you absolutely, positively sure?
Gosh o gosh o golly!
It's obvious you're going to believe what you like instead learning how it really works, but for anyone else reading this thread, what I said is true. There are plenty of sources to confirm that. Here's just one. From the SEC's website: " Sometimes a company pays a dividend in the form of stock rather than cash. The stock dividend may be additional shares in the company or in a subsidiary being spun off. The procedures for stock dividends may be different from cash dividends. The ex-dividend date is set the first business day after the stock dividend is paid (and is also after the record date).
If you sell your stock before the ex-dividend date, you also are selling away your right to the stock dividend. Your sale includes an obligation to deliver any shares acquired as a result of the dividend to the buyer of your shares, since the seller will receive an I.O.U. or "due bill" from his or her broker for the additional shares. Thus, it is important to remember that the day you can sell your shares without being obligated to deliver the additional shares is not the first business day after the record date, but usually is the first business day after the stock dividend is paid."
And that just happens to agree with what the company says in its March 26 press release.
"The shareholder letter I got said all shareholders of record as of the close of business on 4/10/15 will get shares."
It also says that if you sell those shares before April 27, you're also selling the right to the spinoff. And it mentions that WIN shares are now trading with due bills attached. The due bills obligate any seller through April 24 to forward the spinoff to the buyer of the sold shares. As a shareholder of record on the 10th, you'll see the spinoff shares enter your account on the 24th, but because you sold, you'll also see them leave your account sometime during the following week.
Almost all spinoffs work this way. There's nothing unusual about it. Standard procedure.
"They can't get the shares without holding the Win stock on May 24th the spin off date correct?"
First, the distribution date is April 24, not May 24. You must hold the shares at the close of trading on April 24, which means you can buy them as late as the 24th. As with any distribution, any shares purchased before the ex-date will get the distribution, providing those shares are not sold until the ex-date, which is April 27.
"Haven't you read the shareholder letter sent this morning?"
Shareholder letters mean nothing concerning the ex-date. It is the ex-date that determines who gets the spinoff shares and the ex-date is set by the stock exchange. The stock exchange has already set as April 27. Anyone who sells before that day doesn't get the spinoff shares, no matter what the company says or how you misinterpret what they say.
"The shareholder e-mail shocked me when I learned I was getting the shares despite selling yesterday. I was a shareholder of record on the 10th!"
You couldn't have learned that because it isn't true. The company press release in March clearly tells you that any shareholder of record who sells before the distribution date is also selling their right to the spinoff.
Joke's on you.
"You must buy today for the settlement date of April 16th since it takes 3 days to settle."
No, that's not the way it works. You've got the three day settlement right, but you're applying it to the wrong date. A purchase has to settle on or before the record date to be eligible for a dividend. The only purpose of an ex-date is to take into account the three days necessary for a trade to settle on the record date. The ex-date is the first day that a purchase doesn't qualify for a dividend because a purchase on an ex-date results in a settlement the day after the record date. The last day to buy for this dividend is Wednesday, the 15th, not today.
There are a lot of websites that have the exact same explanation with the exact same wording, and all of them are wrong. Each one of them also goes on to say, "a stock will usually begin trading ex-dividend or ex-rights the fourth business day before the payment date," which is fully 20 years out of date. Trading ex four days before the record date is the way it worked when it took five days to settle a trade. The five day settlement period was changed to three days in 1995.
So, every place that has that information is nothing more than a copy/paste job by people who don't have any idea how it really works.
If you do a google search for "understanding dividend dates" you'll find the right information.