"explain how you can buy a stock on the same day of the dividend payment and receive the
dividend the same day"
"The stock want settle for 3 days after."
That has nothing to do with anything. As with all dividends, it is the ex-date that determines who gets the dividend. Buy before the ex-date (even one day before) and get the dividend. Buy on or after the ex-date, don't get the dividend. With the ex-date being the day after the payment date, this is how it works:
All AWRE shares sold from July 8 through July 24 have what is called a due bill attached. The due bill obligates the seller to forward the dividend to the buyer. On July 24, all shareholders of record as of July 10 receive the dividend. But also on July 24, the due bill process is triggered, meaning that anyone who sold their AWRE shares before July 25 will see the dividend removed from their account and forwarded to the buyer. That process is handled by the brokers, not the company, and the brokers have three days to complete the due bill process, meaning the dividend is due to the rightful owners by July 29.
This same process is used with spinoffs and has been standard procedure for longer than anyone on this board has been trading stocks. It's nothing new.
"Hey Chump; you need to bone up before you give out information."
Everything I wrote is 100% accurate. It's been standard procedure for cash dividends amounting to 25% or more of the stock's price for decades. What planet have you been living on?
"so there is a very good chance that people will dump 5 days ahead"
Five days ahead of the payment date or the ex-date has no bearing on anything.
"there are special rules to selling after the dividend takes place"
No, there aren't. After the dividend payment date is the ex-date and selling on the ex-date is exactly the same as selling any other dividend paying stock on the ex-date.
"so as long as you own shares on the date of July 10th you get paid july 24th and could sell 7/25"
You needn't own shares on July 10 to get the dividend. You need to own it no later than the 24th. Anyone who owns it on July 10 and sells before the ex-date of the 25th will also be selling their right to receive the dividend. They are selling that right to the buyer, so you can buy as late as the 24th and qualify for the dividend. But because the 24th is the payment date, anyone who buys on the 24th won't get the dividend until the due bill settlement date, which is July 30.
"For me its different according to sources I have to wait 5 days to sell"
No. You've been misinformed. If you own AWRE at the close of trading on July 24th, you can sell it the very next day and still receive the dividend.
In my first post on the distribution process, the line "All RYN shares sold from June 18 (two days before the record date)" should read: "All RYN shares sold from June 16 (two days before the record date)"
Simply as a courtesy, the company announced that shareholders of record who sell before the ex-date lose the right to the RYAM shares and then recommended that shareholders consult their brokers for an explanation of the rest of the process: "Rayonier shareholders are encouraged to consult with their financial advisors regarding the specific consequences of selling Rayonier common shares on or before June 27, 2014."
"They mention a record date (which I took to mean is also the ex-date based on the context)"
No, the record date and the ex-date are two different things. They never fall on the same day.
"Do you know of a different resource I can look at?"
Sure. Do a google search for "deferred ex-date" and you'll find several good explanations ... well, I'm not saying they're better than MY explanation, but they're pretty good!
"I just looked at the "Information Statement" posted in the Investor Relations section of Rayonier's web site. It clearly says that the shares are to be distributed on June 27th."
Yes. To all shareholders of record.
"I'm not sure how they could distribute shares after the distribution date."
They don't. That's why they say the shares go to shareholders as of the record date. The reason that's all they say about it is because that's the end of the company's involvement in the spinoff distribution but that's not the end of the process. Notice in the June 16 press release where the company warns investors that "Rayonier shareholders who sell their shares in the “regular-way” market on or before June 27, 2014, will also be selling their entitlement to receive the distribution of Rayonier Advanced Materials common stock."
That's because the ex-date, as mandated by FINRA rules, is the first trading day after the distribution date, in this case June 30.
If shareholders of record who sell their RYN shares before June 30 are also selling their right to the RYAM spinoff shares, who then gets the RYAM spinoff shares? The buyers of the RYN shares, of course. But the company will have distributed the RYAM shares on the day before the ex-date, so how does the RYAM spinoff shares get to the rightful owners? All RYN shares sold from June 18 (two days before the record date) through June 27 (the distribution date) are sold with due bills attached. The due bills require the seller of the RYN shares to forward the RYAM shares to the buyers of the RYN shares. When the due bills are executed, the RYAM shares are then withdrawn from the sellers' accounts and transferred into the buyers' accounts. The execution of the due bills is handled by the brokerage houses. The company does not participate in that process. That's why they are not obligated to explain it to shareholders.
To be continued
"ALL shareholders as of May 28th, 2014 will Receive those Asterias Shares"
Yes. And any shareholders of record as of May 28 who sell their GERN shares before the ex-date, which hasn't yet been established, will also be selling their right to the Asterias shares, so will see those Asterias shares pulled out of their accounts on the due bill settlement date. Standard spinoff procedure.
"I thought you had to be a shareholder as of May 28, 2014 and remain a shareholder until the Asterias shares were issued."
You can buy as late as the distribution date and receive the Asterias shares. The ex-date is the first trading day after the distribution date, which hasn't yet been established.
May 28 was the record date. It is the ex-date that determines who gets the spinoff, not the record date.
"The material I received says that June 18th was the cutoff"
No, it doesn't. June 18 is the record date. The ex-date is June 30. The company's information is very poorly worded, so you have to read it very carefully, specifically where it says, "Rayonier shareholders who sell their shares in the “regular-way” market on or before June 27, 2014, will also be selling their entitlement to receive the distribution of Rayonier Advanced Materials common stock."
That means June 27th is the last day to buy and get the spinoff because the entitlement sells with the shares through June 27.
"If you bought today, it's the ex div date and you will own by the 30th."
What? If you buy today, you will be a shareholder of record on July 1st, not June 30.
"That means you get the July 14th dividend."
No, that means you DON'T get the July 14 dividend. The ex-date is the first day that buyers DON'T get the dividend.
"My first sentence should have been: Yes you would receive the value of the dividend"
OK, now I see what you were getting at. Yes, "the value of the dividend" would've made all the difference.
"I thought the rest of my post explained it clearly and accurately."
Yes, it did.
"if the stock is marked down tomorrow by the amount of the divy (27 cents), that could bring the open near the 50 dma and trigger some sell stops"
Unless placed with a Do Not Reduce restriction, the price on all open orders are adjusted down on the ex-date by the amount of the dividend.
The reason the ex-date is after both the record and payment dates is because the distribution amounted to more than 25% of the preferred stock's trading price as of the date of declaration. The specific FINRA rule that mandates such an arrangement is 11140. Transactions in Securities "Ex-Dividend," "Ex-Rights" or "Ex-Warrants":
(b) Normal Ex-Dividend, Ex-Warrants Dates
(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.
Having the ex-date as the first trading day after the distribution (and after the record date) is standard procedure for certain distributions, sometimes with cash and all the time for stock dividends (spinoffs). Stocks having ex-dates after the record and distribution dates in the next few weeks are RYN, CHK, GERN, and a couple others I don't remember just now.
"So even if you sold it yesterday (prior to today's ex dividend date), you would still get the dividend?"
"I would just think they would take list at closing prior to the ex div date to determine who gets a dividend thus if you sold prior to the close you would not be on that list."
That's exactly what they do, by looking at who is the shareholder of record on the record date -- anyone who buys before the ex-date and holds is a shareholder of record on the record date. You are correct.