"A little early?"
No, the post-split pricing is not being shown on Google Finance. It's showing When-Issued trading, which will continue through the close of June 30. The current When-Issued pricing is probably close to the post-split pricing, though. That's one of the purposes of When-Issued trading.
"The separation was priced on the close the 22nd I thought."
No, the 22nd was the record date, which has nothing to do with the pricing of anything. The pricing of the separation will be established by the closing price of When-Issued trading on June 30.
"the price automatically drops by the amount of the dividend as of the first trade on the 28th"
No, that's not the way the dividend adjustment works. The only traded price that's automatically reduced is the closing price quote of the day before the ex-date. The prices of all outstanding orders not placed with a Do Not Reduce restriction are also reduced, but those trades have not yet happened; they are orders only. The first trade at the open on the ex-date is not adjusted by anything, automatically or otherwise. Like any time of day on any trading day, the market is free to open trading on the ex-date at any price. The opening price on the ex-date is determined by an agreement between a buyer and a seller, not by any mandated price adjustment to the previous day's close.
Looking at a just few stocks opening on their ex-dates will clearly show that very seldom does the first trade execute ate the previous day's close minus the amount of the dividend. It might, but far more often it won't. It's usually fairly accurate to say that a stock will open on the ex-date down by ABOUT the amount of the dividend, as most traders are not willing to pay the same price for a stock on the ex-date as on the day before, because they won't get the dividend, but news that would affect the stock price on any other day will also affect it on the ex-date, to either the upside or the downside, depending on the type of news. Sometimes with good news, a stock on its ex-date might open higher than the previous day's closing price.
The price action of CY on the last ex-date shows that it doesn't necessarily open at the previous close minus the dividend. March 28 it closed at 8.51. the dividend was 11 cents, yet the open on the ex-date was 8.35, down 16 cents, not 11. On the one before that, it closed December 28 at 9.63. It opened on the ex-date at 9.56, down only 7 cents, not 11 cents. So no, the drop is by no means automatic or directly proportional to the dividend.
"You MUST buy BEFORE the Ex dividend date. If you do then REGARDLESS of when you sell you get the dividend."
So according to you, I can buy it before the ex-date and also sell it before the ex-date and still get the dividend. That's creative thinking on your part. Either that or poor wording.
BREXIT is the symbol for a British REIT that excludes information technology. It doesn't trade in this country, but it might if England leaves the European Union.
You mean the dividend that they suspended last December? The one that's now zero?
I'm not saying I'm right, but I suspect that a dividend that's no longer being paid would not need an ex-date, so the stock exchange probably hasn't established one.
"PNNT announced couple weeks ago that x-dividend date would be June 18th."
No, it didn't. It announced that the record date will be June 20, which makes the ex-date June 16.
It's not the company's responsibility to teach its shareholders the technical aspects to stock trading, so they are not obligated to explain the due bill process. But they are fully aware of it. That's why they told sunday_on_line that his June 10 purchase of the stock qualifies him for the dividend.
clydorn, why didn't you do as I suggested and study up on deferred ex-dates instead of continuing to wallow in a fog of misunderstanding? Do you somehow believe that a lack of knowledge helps you to be a better investor? What is wrong with actually understanding what you're talking about instead of repeating the same obvious and complete misunderstanding of the facts?
From the SEC website, concerning ex-dates that come 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."
Due bills, clydorn, due bills. Until you understand the due bill process, you will continue to be ignorant of the the way this dividend really works. And continuing to repeat your misunderstanding helps no one. Study up!
"cwn: in this case TAL did not "TRADE" ex-div on 06/06 because the div was not being paid until later."
Why are you telling me what I already told YOU several times?
Yes, I know it didn't trade ex-dividend on the sixth. That's why I told you repeatedly that it didn't.
I said in my last post that I was done with you but since you've finally grasped a portion of reality, I'll hazard another try at explaining why you remain wrong on the eligibility part of your misunderstanding.
The ONLY function of an ex-dividend date is to determine that anyone who buys before it will qualify for the distribution, and that anyone who buys on or after it will not. That is a FACT, clydorn, not a guess or a supposition. And since June 15 is the ex-date, NOT June 6, you remain wrong in believing that buyers after June 6th will not get the dividend.
As to your continuing to believe that the record date has anything to do with determining who gets the dividend, you are completely overlooking the due bills. You obviously have never heard of due bills. The employment of the due bill process is why you continue to misunderstand the company's statement, ""the special dividend will be paid on June 15th, 2016 to holders of TAL common stock as of the close of business on June 8, 2016."
Yes, all shareholders of record as of June 8 will receive the dividend from the company. But any shareholder of record on the 8th who sold/sells the stock before the ex-date of the 15th will be obligated by the due bills attached to EVERY trade beginning June 6th and running through June 14 to forward the dividend to whoever they sold the shares to.
So the company's statement that it will pay the dividend to shareholders of record as of June 8 is entirely correct, but incomplete. The company doesn't tell you about the due bill obligation because it doesn't participate in the due bill process. That is handled entirely by the brokerage houses. (To be continued in the next post...)
clydorn, you've already proved you do not understand that contingent dividends do NOT follow normal dividend rules. I will give you one last proof that in such cases the record date does NOT determine who gets a contingent dividend, and then I am done with you. You obviously have a closed mind and are unwilling to consider that there are processes in the stock market that you don't understand.
From the New York Stock Exchange Listed Company Manual, concerning the use of deferred ex-dates with contingent dividends (also called Conditionally Authorized Distributions):
"While the purchaser of stock during the period between the normal "ex" date and the deferred "ex" date is paying full value, including the value of the distribution, he does not become a record holder entitled to receive the distribution directly from the company. Therefore, the seller, who is the holder on the record date and the prospective recipient of the distributed shares [or cash], is required to assign the right to these shares to the purchaser."
"I'm a bit confused about whether TAL went ex-div on June 8."
Seems like a lot of people on this board are.
"Also, the dividend is not a certain dividend, it is contingent on the shareholder approval of the merger."
Yes. That's why it didn't go ex on the 6th. Look at historical prices on Yahoo. It always shows the dividends on the ex-date and it doesn't show a dividend on the 6th because the 6th was not the ex-date.
"So, if the share price doesn't do the dividend drop until it is paid on June 14, 15 or 16 or so"
If the conditions are met, it will go ex the day after the payment date.
"the shareholder who bought on June 9, 10, 12, etc (who does not get the dividend) overpaid ..... or am I not getting this right?"
No, you're not getting it right. If the conditions of the dividend are met, and it is paid, any shareholder of record as of the 8th who sells the stock before the true ex-date (the day after the payment date) will be obligated to forward the dividend to the buyer. That means that anyone who bought/buys the stock beginning June 6 through the payment date won't receive the dividend on the payment date, but several days later after it has been forwarded by the former shareholder of record.
If you do a search for deferred ex-date, you'll find many explanations of this process.
Those are the rules for normal dividends, not conditional dividends (also known as contingent dividends). Under certain circumstances, conditional dividends being one such circumstance, it is not the record date that determines the ex-date but the payment date. In such a case where the ex-date comes after a record date, it is called a deferred ex-date. In cases of a deferred ex-date, the only purpose of a record date is that only shares outstanding as of that date will participate in the dividend.
Nowhere is the ex-date listed for that dividend because it cannot be determined until the conditions of the dividend are met. If you read up on deferred ex-dates, you'll understand how they work.
"If they are spinning Fortive off and they are not keeping any Fortive stock, the result will be how much cash to DHR?"
The result of the spinoff will be zero cash to DHR. A spinoff means they're giving stock in the new company to existing shareholders, not selling it to them.
June 6 was not the ex-date for the special dividend. It is a conditional dividend, and conditional dividends cannot have an ex-date before the conditions of the dividend have been met. If the conditions are met, it will use a deferred ex-date.
That was the effective date for the 1 for 8 reverse stock split. It has nothing to do with any cash dividend.
"1:5 (not 15)"
Not fifteen? Where do you see "not 15" in the company's explanation:
"Each current share of Hertz Global Holdings will represent one share of Herc Holdings, but those shares will be adjusted for a 1-for-15 reverse stock split that will be implemented immediately after the separation."
"So are they saying HTZ will trade @ $150 after 15 to 1 split?"
No, you're leaving out a step. As with all spinoffs, the parent company's stock price will be reduced on the spinoff ex-date by the value of the spinoff shares. That will drop the price of HTZ so low that they will simultaneously enact the reverse split to get the price back up to a reasonable level. What their definition of a reasonable level is remains to be seen.
"Normally reverse splits are very bad news."
Not in this case. It's to adjust for the loss of the value of the spun off company rather than to temporarily reverse a protracted and calamitous price slide.
"Have not seen how much equity is coming out of HTZ for HTI."
That's because it hasn't been decided yet. That will happen during When Issued trading, and that begins June 20.
It's part of the value of your pre-spinoff, pre-split position. That's why the value of a spinoff is deducted from the trading price of the parent company on the spinoff ex-date. It's also the reason for the reverse split of the parent company. For the third it's, it's also the reason a spinoff is a distribution, not a dividend.
Distributions, whether they be stock or cash, dividends or not, are always part of the value of the pre-event position. That's why any distribution of any kind is deducted from the price of the distributing company. If that value is less than the normal daily trading range of the stock, it won't be noticed, as it will be lost in that daily trading range. But if the distribution is substantially greater than the normal daily trading range, the price adjustment will be noticed. This one will be noticed. Some will notice it for what it is, and others will notice the post-reverse split price and think the value has soared, not realizing what has taken place.