That depends on what the stock does after tomorrow. Why would you think today or tomorrow will be any different from yesterday or the day before?
"Ppl will drop by $4 to $29.75 based on march 31st closing price."
No, that's not how the repricing of a spinoff is calculated. On the ex-date the previous day's closing price of PPL will be adjusted down by 12.49% of TLN's closing price in when-issued trading as of the day before the ex-date.
You missed the fact that PPL isn't spinning off one full share of TLN for every share of PPL, so you can't add the two quotes together and expect the result to be anywhere close to the current PPL price. You need to use the proper ratio.
"hivoltagebob seems to be bit lacking in the math department, or he is confused as to the actual dividend amount."
No, he thinks the reverse split hasn't happened yet.
"However, the yield will NOT be 7.2%."
Yes, it definitely will.
"One of us will be eating crow."
That would be you.
"However, also, in the beginning of the same paragraph, it says "after giving effect to the one-for six reverse split."
Yes, but the reverse split is not pending; it has already happened. It took place after the close of trading on April 24. The press release of May 6 says, "following the spin-off of CS&L on April 24, 2015 and after giving effect to the one-for-six reverse stock split ..." The reverse split took place on the very same April 24 as the CSAL spinoff. There is not going to be another reverse split, so the 60 cents is for the current price of 8.27, resulting in yield of 7.2%.
As for your comment to somebody to tried to explain the facts to you, "I may be lacking in the math department, perhaps you are lacking in the reading comprehension department," it's YOUR reading comprehension that's lacking. And how carefully have you been following this stock if you completely missed a 1 for 6 reverse split?
"i believe its 5 p.m. on the 20th of may"
No, that's the record date. The ex-date is June 2.
"That is correct according to the prospectus I received"
No, it's not correct. May 20 is the record date, not the ex-date. The ex-date is June 2. The company announced that in its April 29 press release. Yes, the explanation is confusing but that's the standard explanation for companies issuing spinoffs. Why they can't be more clear, I don't know, but the fact remains that June 2 is the ex-date.
"Will the PPL price drop by the value of the TLN price?"
Yes. Talen will begin trading in the when-issued market on Monday to establish a value. On June 2 PPL will be reduced by the proportional value of the Talen (TLN) June 1 closing price.
"FINRA Rule 6490 (Processing of Company-Related Actions) requires all OTC companies to notify FINRA (the Financial Industry Regulatory Authority) of specified corporate actions at least 10 days before the record date or effective date. ... These actions include: A dividend or other distribution in cash or in kind, except an ordinary interest payment on a debt security, but including a dividend or distribution of any security of the same or another issuer"
"You buy at discounted prices from existing inventory."
Whether the issued shares are treasury stock or not, they are currently not outstanding shares, so the outstanding share count will in fact increase. Only the outstanding shares share the earnings; treasury stock does not.
But the simple act of increasing the number of outstanding shares does not automatically mean dilution. Whether or not the newly outstanding shares constitute dilution depends entirely on the return on the new capital raised by the sale of the shares. If the return is equal to the return on existing capital, it's a wash. If the return on the new capital is less than on the existing capital, then the deal dilutive. But if the return on the new capital is greater than on the existing capital, the deal is accretive.
"You're talking about the day of the dividend distribution."
No, I specifically said, "on the distribution ex-date," not the day of the distribution.
"How the markets react to the distribution announcement is not the same as how it works on the day of distribution."
And that has what, exactly, to do with the price adjustment on the ex-distribution date?
"It's only fact if all companies trade at book value."
No, it's a fact no matter what the price to book value is. All outstanding orders for XOM before the market opens on the ex-distribution date WILL be reduced by the proportional value of the ZIOP shares (unless placed with a DNR restriction). The adjustment of the open orders is a fixed rule of FINRA; it is not optional. And it certainly has nothing to do with book value or stock price.
FINRA rule 5330: Adjustment of Orders
(a) A member holding an open order from a customer or another broker-dealer shall, prior to executing or permitting the order to be executed, reduce, increase, or adjust the price and/or number of shares of such order by an amount equal to the dividend, payment, or distribution on the day that the security is quoted ex-dividend, ex-rights, ex-distribution, or ex-interest, except where a cash dividend or distribution is less than one cent ($.01), as follows:
(1) Cash Dividends: Unless marked "Do Not Reduce," open order prices shall be first reduced by the dollar amount of the dividend, and the resulting price will then be rounded down to the next lower minimum quotation variation.
(2) Stock Dividends and Stock Splits: Open order prices shall be determined by first rounding up the dollar value of the stock dividend or split to the next higher minimum quotation variation. The resulting amount shall then be subtracted from the price of the order. Unless marked "Do Not Increase," the size of the order shall be increased by first (A) multiplying the size of the original order by the numerator of the ratio of the dividend or split, then (B) dividing the result by the denominator of the ratio of the dividend or split, then (C) rounding the result to the next lowest share.
"Isn't this awesome or what?"
Why is it awesome? Are you not aware that the stock price of XON will be reduced by the proportional value of ZIOP on the distribution ex-date? You're not getting the ZIOP shares for free.
fstout57 is correct. You're mixing up the terms. You have to be a shareholder of record on the 11th, not the 7th. The 7th is the ex-dividend date specifically because it takes into account the three day settlement period to become a shareholder of record on the 11th.
I was not predicting the price of WIN post split. I was simply demonstrating the method by which the adjustment is made for open orders, which will also be the basis by which the change of price is calculated on April 27. The stock will not be obligated to open trading at that price, as only market forces can determine that, but the adjustment is a completely accurate measure of what the market decided WIN was worth at the close of trading on April 24.
The only assumptions I made were the closing prices of CSALV and WIN on April 24, and only for the purposes of example. And since I failed completely with that example, I have accomplished nothing ... no, wait -- I gained a new best friend in you, Brock! Isn't that worth more than any mere financial gain?
Of course you love me, Brock -- I'm doing you a favor. If you had anything of substance to post, you wouldn't need someone to respond to. But since all you can come up with are jokes that don't work, I'm giving you someone to address your pointless comments to. Makes you feel like you belong somewhere, apparently.