Ah, you're right. I was thinking CYH in regular-way trading. You specifically said "WI shares of CYH."
"Assuming QHC is worth $4/share of our CYH holdings, why wouldn't CYH be down $4/share today since Friday was the "record date" for the QHC distribution?"
Because the price adjustment for the spinoff of QHC doesn't happen on the record date, it happens on the ex-date. The ex-date for the spinoff is May 2.
"buyer's today do not get the benefit of the spin off of shares"
Yes, they do. The right to receive the spinoff shares continue to trade with CYH until the ex-date, which is May 2. Spinoff ex-dates don't work like cash dividend ex-dates. With spinoffs, the ex-date is the first trading day after the distribution date.
" If you add both prices of the WI together it comes to approx. $19.57"
You don't add them together. 15.57 is what CYH is worth including the QHC. On the ex-date the value of the QHC will be deducted from the trading price of CYH.
"your purchase has to settle on/before ex divvy date"
No, it has to settle by the record date, not the ex-date. The ex-date takes into account the three day settlement period for becoming a shareholder of record on the record date. A purchase the day before the ex-date settles on the record date; a purchase on the ex-date settles the day after the record date, which is why the ex-date is the first day a stock trades without the right to the dividend.
"Ex Div Date 4/6/16 for those holding 4/8/16"
Not "holding 4-8," but "shareholders of record" on 4-8. Being a shareholder and being a shareholder of record are not the same thing. Anyone who sold today (4-6) will still be a shareholder of record on the 8th because it takes three days to settle a trade.
But the stock price almost always drops by the amount of the dividend, so it's a wash. They're out the cash, but their short position is enhanced by the drop in stock price. At last year's special dividend of 4.10, the stock closed down over seven dollars on the ex-date and continued to trade down further for the next week or more. A short position would've been well ahead for not covering before the ex-date.
So my question stands. Why would any size special dividend scare shorts? The last special dividend was a boon to short sellers.
"Goes ex-dividend on the 7th so still time to buy and settle by then?"
To qualify for a dividend, a purchase has to settle by the record date, not the ex-date. The ex-date takes into account the three day settlement period necessary to become a shareholder of record on the record date. That's the only function of an ex-date -- to establish that as of that date, it's too late to buy the stock for the dividend.
"Adjustment drop in on ex-div date, not day after."
Nearly every stock I buy has an adjustment drop the day after I buy it, whether it's the ex-date or not.
"you have to own the stock today or you miss out"
No, you have to be a shareholder of record today to get the dividend. You don't have to own the stock today. Owning a stock and being a shareholder of record are two different things. You don't become a shareholder of record until your purchase trade settles, three business days later, yet you own the stock the instant your buy trade executes. You also remain a shareholder of record for three business days after you sell a stock (until the trade settles), though you're no longer an owner the instant your sell trade is executed. So anyone who sold the stock on the ex-dividend date of March 29 remains a shareholder of record until tomorrow, April 1.
The wash rule doesn't apply to tax advantaged accounts and many traders don't care anyway. Very few short term trade decision are driven by tax consequences.
"It has been suggested by posters on this board that when the split is announced, shareholders will have had to be holding their shares for at least 90 days in order to receive shares in the new company"
That's only because those posters don't know what they're talking about.
"I scan most of the filings and press releases, but don't recall reading of such a requirement anywhere."
The only reason you can't find it is because no such requirement exists.
"Does anyone have experience with other companies who have split in a similar way that Alcoa is planning to do, and was there a holding period requirement in order to get shares in the spinoff company?"
Yes, there is always a holding period requirement with spinoffs, and it is always exactly the same for every spinoff: To receive a spinoff, you must be a holder of the parent company shares as of the close of extended hours trading on the last trading day before the spinoff ex-date.
There will be no end of confusion and false claims on this board as the spinoff ex-date approaches, due entirely ignorance, fueled through both a general lack of understand and the fact that for this spinoff, quite unlike normal cash dividends, the ex date will be not before the record date but after it. To be specific, the ex-date for the spinoff will be the first trading day after the distribution date. To read up on how spinoff dates work, do a google search for Understanding Dividend Dates, click on the first return, and scroll down to that part that starts with Dividends of 25% or More of a Company's Stock Price. Spinoffs use the same rules as for dividends of 25% or more of a stock's price.
"would you use apostrophe's instead?"
You've already overused the apostrophe by writing "apostrophe's." It doesn't belong there.
As to hammering home a point, all you need to do is pound on the keyboard really hard when you're typing. Either that or do what I do when I want to emphasize a point: Yell at the screen when you proof read the post.
You really need to be careful about abusing quotation marks. I don't know this to be true but I've heard that quotation marks and apostrophes are both gateway punctuation to exclamation points. Eventually you overdose on commas and you're found (usually too late) face down on your keyboard, leaving your friends and family with nothing but question marks.
At your funeral the eulogist wants to quote something profound you may have said at sometime in your life, and it starts all over again.
It's an ugly circle, isn't it?