"... at next to nothing interest rate. additionally, deduct the interest paid from corporate taxes."
If the interest rate is next to nothing, then how could the tax deduction for it be anything other than next to nothing too?
"Owners of record as of that time."
No, you have to be a shareholder of record as of the close of business on the 13th, not the 10th. The 13th is the record date. The 11th is the ex-date. And because of the three days necessary for a trade to settle, to be a shareholder of record as of the close of business on the 13th, you would have had to buy the stock before the end of extended trading on the 10th.
As the company's press release says, the dividend goes to stockholders of record as of Feb 9. You do not become a shareholder of record until your purchase trade settles. Because of the three days required for a trade to settle, you didn't become a shareholder of record until Feb 11.
To become a shareholder of record on Feb 9, you had to buy no later than Feb 4. That's why Feb 5 was the ex-date. The ex-date is the first day a stock trades without the right to the dividend. So you bought two days too late to get the dividend.
"Where do you get this rule?"
Do a google search for "deferred ex-date" including the quotation marks, and you'll find a variety of good sites that explains why g_duhbya is right.
"this spinoff isn't going to be like a dividend or some other form of distribution that will have a definite $ amount stated."
Yes, it will.
"who is that will determine the market price of either company on the day both companies start trading on their own?"
Spinoffs of any size, and that will include this one, will begin trading at least several days before the ex-date on a when-issued basis. That's how the value is determined. By open market trading
"assume the price of yhoo on the record date was $40. that price wouldn't change that day or even later because there would be no way of valuing either company until the spinoff occurred."
The price adjustment doesn't happen on the record date, it happens on the ex-date, and the ex-date will be after the record date. And yes, the value of both companies will be determined by when-issued trading. That's what it's for.
"all of the buy/sells of yhoo shs after the record date will probably carry with them a DBA. (Due Bill Attached)."
Not AFTER the record date. Due bills are attached two trading days BEFORE the record date. That is the day that would be the ex-date for normal dividends but not for spinoffs. The ex-date for spinoffs of this type is the first trading day after the payment date. And because the spinoff will have been trading on a when-issued basis for days or weeks, the value is known, and the price adjustment will happen on the ex-date, according to the closing price of the spinoff as of the payment date.
"basically i think my point is correct"
No, actually it's not. You need to study up on the spinoff process.
Not about the
Two hours later and so far two idiots have given my post of simple facts thumbs down. Proof that the ignorant choose to remain ignorant. And as ignoramuses attract other ignoramuses, by Tuesday a whole bunch more will have checked in no doubt. Hilarious!
Somebody will have an idea of what the spinoff should be worth at the start of WI trading because somebody will put in an order to buy at a certain price. I doubt WI trading ever begins with an At The Market buy order.
No, you can't necessarily expect an announcement of an estimated worth per share before WI trading. Sometimes an analyst will offer an expected price, but oftentimes the only price the public sees is the opening trade price.
"if, as you say, trading for the spinoff starts trading at w-i basis days before the ex-date, wouldn't that also be setting the new price for the yhoo core?"
Yes. When WI trading begins for the spinoff, the parent company will begin to trade two ways, each with a different symbol. The regular way trading will continue with the current symbol, and those share will still carry the right to the spinoff, and the post-spinoff shares will begin trading with a -WI extension to the symbol. The WI shares will not include the right to the spinoff, and therefore represent the price of the parent company minus the market value of the spinoff shares.
And to answer a question you had in another post that seems to have disappeared, yes, while the spinoff is trading when-issued, YHOO will trade two ways, regular and when-issued, just like in the example you found.
No. Companies are not allowed to set ex-dates. Only the stock exchanges can do that, and their rules require more lead time than that anyway.
"It is my understanding that the ex dividend date follows the dividend date with special dividends."
That doesn't apply to special dividends in general, but only when the distribution amounts to 25% or more of the stock's trading price as of the date of declaration. This one looks like it will be subject to that rule as long as the price doesn't go too high before the declaration. It looks more like a $25 distribution than a twenty dollar one.
"it could also be a defensive measure by the board"
Yes, that's usually why companies that don't need the money borrow huge amounts with which to pay huge distributions.
"What was the proposed amount per share?"
There is no proposed amount per share yet, but the high end is easy to figure. In its announcement of the notes offering, the company says, "Nathan's intends to use the net proceeds of the Notes offering to pay a special dividend of up to approximately $116.0 million." With 4.482 million shares currently outstanding, that comes out to $25.88 per share. The company didn't give a low end figure, but if it is indeed for defensive purposes, it can't be too much less or else the note issue would be pointless.
"I am unclear on the tax consequences"
The tax consequences can be one of several, so it's probably not possible to know at this point. The majority of times, any distribution in excess of taxable income for the year in which the distribution is paid is a temporarily tax-free return of capital (ROC). In cases of ROC, your basis in the stock is reduced by the amount of ROC per share, so when you sell the stock, you then pay capital gains rates on the profit, including the amount by which your basis was reduced by the ROC.
Again, that's in most cases with big distributions, not all. Sometimes the entire amount is ROC, sometimes only a part, and in rather rare cases, the whole amount is taxable as non-qualified distributions (although that last one may apply only to spinoffs; I'm not sure). Those are the possibilities that I'm aware of and have experienced. I wouldn't even try to guess what tax implications will actually apply. Often times companies don't tell you until after the end of the fiscal year, simply because they don't know until the books have been closed for the year.
"The simple fact is that if you take out $0.30 in dividend, the per share price is automatically and programmatically adjusted downwards $0.30 by Nasdaq"
No, it's not. The only prices automatically adjusted down by the amount of the dividend on the ex-date is the quote of the previous day's close and those of any outstanding orders not placed with a Do Not Reduce restriction. The opening price on the ex-date is determined entirely by the auction market, just as it is throughout that day and every day for every stock. That's proven time and time again by stocks not opening at exactly the previous close minus the dividend. Traders are well aware that a stock trading on the ex-date doesn't include the right to the dividend, so don't bid as if it did.
"and so, the net gain for speculators is zero, and, with the immediate panic and sell-off that follows this surprising adjustment"
The adjustment is no surprise to anyone who knows how it really works. It's a surprise only to those who don't.