"You're correct Juno."
No, he's not, and his ID starts with jdrun, not juno.
"Some shorts on this board were trying to create confusion by posting all kind of misinfo.such as if divvy is more then 25% of whatever balloneys."
Why are you so resistant to the facts? You should be able to find the truth on the Internet in a matter of minutes ... OK, so maybe you can't, but any ten year old girl could, so maybe you could get one to help you.
"1. In order to collect the divvy you need to be on record on Sept.12th"
"whoever want to collect the divvy need to buy no later then Sept.9th which is Tuesday."
I can see that you might not want to break your consistency of being wrong, but it's not going to serve you well.
By the way, vmldem, you keep crowing that because you've seen a big dividend from ALBKY last year, every other similar situation must follow how that one played out. If you'd stop being a blockhead and research the matter, you'll find an excellent source that explains that the decision to apply the 25% rule on foreign stocks is determined on a case-by-case basis, not strictly across the board. But of course, learning the truth might wreck your consistency of being wrong, so if you never do wise up, it's perfectly understandable. The familiar is comforting to you, no matter its relevance.
"4) MARCH 25TH 2010 was the last time this stock paid out a dividend. I believe it was a 1.10 dividend at that time."
Yes. And it too worked exactly like this one will. The record date was the 15th. Anyone who sold their MSN from March 11th through the payment date of March 24th also sold their right to the dividend.
What you're not considering is the due bills.
" this is the information I have gathered and I believe it is accurate."
Well, it's not.
"1) You must own the stock by SEPTEMBER 12, 2014 in order to collect the ($.70) per share dividend on September 30th"
No. You must own the stock by September 9th to collect the dividend on September 30th. But if you sell your MSN stock before October 1st, you will be obligated to forward the dividend to whoever held the shares as of the close of trading on September 30. That also means that you can buy MSN as late as the 30th to get the dividend but the transfer of the dividend from the shareholder of record's account to yours will not happen before October 3rd.
"2) In order to officially own the stock by SEPTEMBER 12th you must actually have your purchase order in on September 9th. Otherwise you are not eligible for the dividend."
Wrong again. Any sale from September 10th through the 30th includes the right to the dividend. That means you can buy up to and including the 30th and get the dividend.
"A friend of mine who specializes in dividend stocks brought this to my attention, perhaps someone else on this board can confirm this is true?"
Your friend doesn't know what he's talking about. Why don't you confirm it for yourself? Do a google search for "deferred ex-date" and you'll find multiple explanations. And none of them matches your friend's.
"I was not able to find their supposed publication of said information. Therefore, I feel you are full of it..."
I'm not responsible for your incompetence.
"The ex-date is in question."
No, it's not. The NYSE has already set the ex-date as October 1st. They published it yesterday.
So much for your specious argument.
"All your statements hold true if the dividend is more than 25% of the share price on said ex-date"
Absolutely not. The determination of the 25% threshold is made at the time of declaration and does not change. It's not a moving target.
"In conclusion, the dividend will not be more than 25% of the share price because by Sept, 12 the share price will definitely be more than $2.81!"
No, in conclusion, you're an idiot.
"Is this taxable?"
Here's general answer that might not apply in all cases or to all shareholders:
That depends on the company's earnings for the year in which the distribution is paid. If they have earnings of 70 cents, then yes, the entire amount will be taxable. (I'll let others judge the odds of that happening.)
If the company has no earnings, then it will be a non-taxable return of capital.
If the company has some earnings but less than 70 cents, then that part will be taxable and the remainder return of capital.
But by gosh and by golly, be absolutely sure to consult your personal financial adviser to be confident how this distribution might affect your taxes. Loopholes abound and if you get ahold of one, none of the above may apply to you ... or you may end up in the slammer. Loopholes are kind of a mixed bag.
"FINRA trumps management statement"
No, it doesn't. Management's statement doesn't conflict with FINRA rule 11140. The declaration said that the distribution will be paid to shareholders of record as of September 12th. That is a fact. All shareholders of record as of September 12th will indeed be paid the distribution by the company.
The declaration doesn't include the fact that all shareholders of record as of September 12th who sell their MSN shares before October 1st will be forced to forward the distribution to whoever held those shares at the close of trading on September 30th. But the company isn't required to include that additional information because after the company pays all shareholders of record as of September 12th, the company's involvement in the process is over. The company doesn't participate in the due bill process. That is handled entirely by the brokers.
"= cause for a court trial due to misleading statements by management due to lack of understanding FINRA regulations."
Management fully understands the regulations. Misleading or not, everything the company stated in the distribution declaration is accurate. It is not the company's responsibility to educate shareholders on the mechanisms of the stock exchanges.
"MSN has been around long enough you'd think management would know better."
You have a good point there. Sometimes in situations like this, companies will issue a convoluted "clarification" of the fact that any shareholders of record who sell their shares before the ex-date will also be selling their right to the dividend (and they always include the recommendation for shareholders to consult their financial advisers). They're not required to do it, but it's a shareholder courtesy. I don't recall if they issued a late clarification back in 2010.
"I will be pleased to enjoy my $3500 dividend in October."
September, long_term_investor1 - September 30th.
For those who buy before September 10th, anyway. For those who buy from September 10th through the 30th, the payment date is the due bill settlement day, which is October 3rd.
"We are still 3 weeks away from ex-date"
There you go again with your proprietary math, just like when you said there are eight days between March 2, 2010 and March 25, 2010.
Three weeks from the ex-date, huh? Let's walk through it and see ... there are five days left in August and 30 days in September before the ex-date comes on October 1st. They way I learned addition, five plus thirty equals 35. With seven days in a week, that makes five weeks, not three.
Apparently in your world, each week has 11.6 days. How many of those days constitutes a work week? Eight? Do you think you might spare one of those eight work days to learn how to count?
It is the ex-date, not the record date, that determines who gets the dividend. With normal dividends, the record date is used to determine the ex-date, but with dividends of 25% or more of the stock's price, the payment date determines the ex-date. With the payment date being September 30th, the ex-date is October 1st.
As for your statement, "for any 10K on Sept.12th I'm entitled to get $7,000," if this dividend did follow normal dividend rules, which it doesn't, you would've qualified for the dividend by owning shares at the close of trading on September 9th. The 12th would've been too late. The 12th is the record date. To be a shareholder of record on the 12th, the shares have to be purchased no later than the 9th - which is irrelevant in this case because the ex-date is October 1st.
From the NYSE Listed Company Manual:
"When the distribution is 25% or more, the Exchange will defer trading the security "ex" until one day after the mail date for the distribution. This deferral is in the public interest because the normal "ex" basis of trading would result in the adjustment of the market price by the amount of distribution. For example, in a two-for-one stock split, a normal "ex" would reduce the market price of a $50 stock by $25. Consequently, shareholders would be deprived of the market value of their holdings represented by the distribution between the "ex" date and their receipt of the distributed shares. By deferring the "ex" date, shareholders who sell during this period are able to realize the value of the distribution to which they are entitled as record holders, as well as the value of the shares they already hold and avoid the freezing of a substantial part of the market value of the stock."
The specific FINRA rule is 11140. Transactions in Securities "Ex-Dividend," "Ex-Rights" or "Ex-Warrants"
"(2) In respect to cash dividends or distributions, stock dividends and/or splits, and the distribution of warrants, which are 25% or greater of the value of the subject security, the ex-dividend date shall be the first business day following the payable date."
"What is clear is this- for any 10K on Sept.12th I'm entitled to get $7,000
No, what is clear is that you don't understand how it works. Because this dividend is so large percentage-wise, you don't qualify for it unless you own it as of the close of trading on September 30th. Owning it on the 12th is meaningless.
After you get your $7,000 in dividends, what happens to the price of the stock you're still holding?
Reality doesn't matter when a big dividend is announced. People whose investment strategy is hope and wishful thinking look at it as free money, which of course it isn't, and such things as net revenues for fiscal 2014 being down by 39% or operating income for the same period being down 64% are nothing more than petty details.
"From March 2, 2010 when the news came out, until the March 15 ex-date"
The ex-date for the $1.10 paid in 2010 was March 25th, not March 15th. March 15th was the record date.
"the price jumped from $2.15 to $4.60."
But it closed at $3.21 the day before the ex-date (March 24), and $2.36 on the ex-date, so anyone holding for the dividend didn't get anywhere near $4.60.
"We're not even up to the $2.25 level yet where it was trading a few months ago."
That ought to tell you something right there.
"A 70 cent dividend is no small thing, and it only costs the company about $20 million in cash."
Right. But don't you understand that when the company pays out that 20 million, its net asset value will be instantly reduced by 20 million? And that works out to 70 cents less net asset value per share. So how is the company worth more than it was last Thursday? The company had that 20 million last Thursday. It isn't 20 million MORE than it had last Thursday. And come the ex-date, it will be 20 million LESS.
I remember! Yes, it WAS fun. That's why I'm back for this ridiculous goat roping. This time there are new posters on the board but most of them are obviously no brighter than the last group.
That's not to say all of them are clueless, of course. Did you know there are only eight days between March 2nd and March 25th? I learned that here just minutes ago. I can't wait to put my new knowledge to practical use next year!
"The biggest difference between the last major dividend and this one is the last time they announced it it the announcement came 8 days before the dividend ex-date, whereas this time the announcement came a few weeks before the ex-date."
Really? The last time they paid a big dividend it was announced only eight days before the ex-date?
Help me with your arithmetic, will you, long_term_investor1?
On March 2nd, 2010, MSN announced a special dividend of $1.10. The ex-date was March 25th. Your math, obviously proprietary, says that there were eight days between March 2nd and March 25th. The math I use, which is apparently different from the math you use, says there was 23 days between March 2nd and March 25th.
If you'd be so kind, long_term_investor1, could you show me where I went wrong? And could you please show your work?
"Seems we both in on the HEES dist. about a year ago."
No, I didn't buy into that. I looked but didn't do it.
"My question to you is, how do find these large dist.?"
And my question is: Why would you want to? They usually don't play out well. They sucker people in and then, more often than not, languish after the price adjustment on the ex-date. Bring up a five year chart of MSN. See that sharp spike on the left? That was the last time MSN paid a big dividend (the last time it paid any dividend, actually). See what it's done since? That's how these things usually go. Everybody who bought into the frenzy over the big distribution lost money. Those who bought before or after may have made money, depending on when they traded it, but those who bought between the declaration and the ex-date are still underwater. The reason is simple and should also be obvious: A company that declares a big dividend is worth exactly the same after the declaration as it was before. The cash to be distributed is already on the balance sheet before the declaration. Giving it away does not make the company worth more.
Regardless of a company's future prospects, the absolute worst time to buy is during the frenzy over a huge dividend.