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Prudential Financial, Inc. Message Board

cwn600 77 posts  |  Last Activity: 20 hours ago Member since: Dec 28, 1999
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  • "As part of the Stock exchange's effort to increase trades, they AUTOMATICALLY reduce the value of a stock by the dividend amount the day that it goes X-dividend."

    No, that's not what happens. The stock exchange reduces only the set price of outstanding orders entered before the ex-date (unless placed with a Do Not Reduce restriction). The stock is free to trade any any price at the open on the ex-date, just like at any other time. That's why it's rare for a stock to open on the ex-date at exactly the previous day's close minus the amount of the dividend. It does happen sometimes but far more often it doesn't. Traders determine the price of every trade through the auction market, and lacking any other information, traders are not willing to pay the same price for a stock on the ex date as they are the day previous because buyers on the ex-date don't get the dividend. It's really that simple. It has nothing to do with the stock exchange trying to increase trading.

  • cwn600 cwn600 Apr 25, 2016 3:37 PM Flag

    Ah, you're right. I was thinking CYH in regular-way trading. You specifically said "WI shares of CYH."

  • cwn600 cwn600 Apr 25, 2016 2:55 PM Flag

    "Assuming QHC is worth $4/share of our CYH holdings, why wouldn't CYH be down $4/share today since Friday was the "record date" for the QHC distribution?"

    Because the price adjustment for the spinoff of QHC doesn't happen on the record date, it happens on the ex-date. The ex-date for the spinoff is May 2.

    "buyer's today do not get the benefit of the spin off of shares"

    Yes, they do. The right to receive the spinoff shares continue to trade with CYH until the ex-date, which is May 2. Spinoff ex-dates don't work like cash dividend ex-dates. With spinoffs, the ex-date is the first trading day after the distribution date.

  • cwn600 cwn600 Apr 25, 2016 2:52 PM Flag

    " If you add both prices of the WI together it comes to approx. $19.57"

    You don't add them together. 15.57 is what CYH is worth including the QHC. On the ex-date the value of the QHC will be deducted from the trading price of CYH.

  • Reply to

    SDLP Dividend Shareholder of Record Date

    by dwhite5555 Apr 13, 2016 3:50 PM
    cwn600 cwn600 Apr 13, 2016 8:49 PM Flag

    "your purchase has to settle on/before ex divvy date"

    No, it has to settle by the record date, not the ex-date. The ex-date takes into account the three day settlement period for becoming a shareholder of record on the record date. A purchase the day before the ex-date settles on the record date; a purchase on the ex-date settles the day after the record date, which is why the ex-date is the first day a stock trades without the right to the dividend.

  • cwn600 cwn600 Apr 10, 2016 3:35 AM Flag

    Yes. You have to hold the shares overnight. Just one night will do it.

  • Reply to

    Will T ever hit $40?

    by back_bay_professor Apr 6, 2016 9:40 AM
    cwn600 cwn600 Apr 6, 2016 8:17 PM Flag

    "Ex Div Date 4/6/16 for those holding 4/8/16"

    Not "holding 4-8," but "shareholders of record" on 4-8. Being a shareholder and being a shareholder of record are not the same thing. Anyone who sold today (4-6) will still be a shareholder of record on the 8th because it takes three days to settle a trade.

  • Reply to

    special dividend ??

    by masycle Mar 29, 2016 11:30 AM
    cwn600 cwn600 Apr 4, 2016 6:41 PM Flag

    But the stock price almost always drops by the amount of the dividend, so it's a wash. They're out the cash, but their short position is enhanced by the drop in stock price. At last year's special dividend of 4.10, the stock closed down over seven dollars on the ex-date and continued to trade down further for the next week or more. A short position would've been well ahead for not covering before the ex-date.

    So my question stands. Why would any size special dividend scare shorts? The last special dividend was a boon to short sellers.

  • Reply to

    here we go again

    by sjkimmel Apr 3, 2016 12:19 PM
    cwn600 cwn600 Apr 3, 2016 4:26 PM Flag

    "Goes ex-dividend on the 7th so still time to buy and settle by then?"

    To qualify for a dividend, a purchase has to settle by the record date, not the ex-date. The ex-date takes into account the three day settlement period necessary to become a shareholder of record on the record date. That's the only function of an ex-date -- to establish that as of that date, it's too late to buy the stock for the dividend.

  • Reply to

    Div - FYI

    by bellbell63 Mar 12, 2016 11:35 AM
    cwn600 cwn600 Apr 1, 2016 3:53 PM Flag

    "Adjustment drop in on ex-div date, not day after."

    Nearly every stock I buy has an adjustment drop the day after I buy it, whether it's the ex-date or not.

  • Reply to

    Dividends made simple:

    by cmscorp9999 Apr 1, 2016 10:28 AM
    cwn600 cwn600 Apr 1, 2016 3:51 PM Flag

    How can cmscorp9999's dividend date explanation be wrong when it says the exact same thing as your previous copy & paste post?

  • Reply to

    Ex Date for Div is Monday the 4th

    by tobypharma Mar 31, 2016 2:53 PM
    cwn600 cwn600 Mar 31, 2016 7:29 PM Flag

    No, the ex-date is Tuesday, the 5th.

  • Reply to

    I wonder

    by dyk742000 Mar 31, 2016 10:02 AM
    cwn600 cwn600 Mar 31, 2016 7:23 PM Flag

    "you have to own the stock today or you miss out"

    No, you have to be a shareholder of record today to get the dividend. You don't have to own the stock today. Owning a stock and being a shareholder of record are two different things. You don't become a shareholder of record until your purchase trade settles, three business days later, yet you own the stock the instant your buy trade executes. You also remain a shareholder of record for three business days after you sell a stock (until the trade settles), though you're no longer an owner the instant your sell trade is executed. So anyone who sold the stock on the ex-dividend date of March 29 remains a shareholder of record until tomorrow, April 1.

    The wash rule doesn't apply to tax advantaged accounts and many traders don't care anyway. Very few short term trade decision are driven by tax consequences.

  • cwn600 cwn600 Mar 30, 2016 3:54 PM Flag

    "It has been suggested by posters on this board that when the split is announced, shareholders will have had to be holding their shares for at least 90 days in order to receive shares in the new company"

    That's only because those posters don't know what they're talking about.

    "I scan most of the filings and press releases, but don't recall reading of such a requirement anywhere."

    The only reason you can't find it is because no such requirement exists.

    "Does anyone have experience with other companies who have split in a similar way that Alcoa is planning to do, and was there a holding period requirement in order to get shares in the spinoff company?"

    Yes, there is always a holding period requirement with spinoffs, and it is always exactly the same for every spinoff: To receive a spinoff, you must be a holder of the parent company shares as of the close of extended hours trading on the last trading day before the spinoff ex-date.

    There will be no end of confusion and false claims on this board as the spinoff ex-date approaches, due entirely ignorance, fueled through both a general lack of understand and the fact that for this spinoff, quite unlike normal cash dividends, the ex date will be not before the record date but after it. To be specific, the ex-date for the spinoff will be the first trading day after the distribution date. To read up on how spinoff dates work, do a google search for Understanding Dividend Dates, click on the first return, and scroll down to that part that starts with Dividends of 25% or More of a Company's Stock Price. Spinoffs use the same rules as for dividends of 25% or more of a stock's price.

  • Reply to

    Dividend Dates

    by bmymrk Mar 24, 2016 3:07 PM
    cwn600 cwn600 Mar 29, 2016 9:04 PM Flag

    "would you use apostrophe's instead?"

    You've already overused the apostrophe by writing "apostrophe's." It doesn't belong there.

    As to hammering home a point, all you need to do is pound on the keyboard really hard when you're typing. Either that or do what I do when I want to emphasize a point: Yell at the screen when you proof read the post.

    You really need to be careful about abusing quotation marks. I don't know this to be true but I've heard that quotation marks and apostrophes are both gateway punctuation to exclamation points. Eventually you overdose on commas and you're found (usually too late) face down on your keyboard, leaving your friends and family with nothing but question marks.

    At your funeral the eulogist wants to quote something profound you may have said at sometime in your life, and it starts all over again.

    It's an ugly circle, isn't it?

  • Reply to

    special dividend ??

    by masycle Mar 29, 2016 11:30 AM
    cwn600 cwn600 Mar 29, 2016 11:55 AM Flag

    Why would any size special dividend scare shorts?

  • Reply to

    Dividend Dates

    by bmymrk Mar 24, 2016 3:07 PM
    cwn600 cwn600 Mar 29, 2016 11:50 AM Flag

    Your information's "all" correct, but "what's" with "all" the "incorrect" use of "quotation" marks?

  • Reply to

    Ex-div date

    by morewhatswrong Mar 11, 2016 10:22 AM
    cwn600 cwn600 Mar 23, 2016 6:45 PM Flag

    Yes, and a shareholder of record date of March 28 makes March 23rd the ex-date.

  • Reply to

    Preferred Dividends

    by spoonie_l Mar 23, 2016 12:05 PM
    cwn600 cwn600 Mar 23, 2016 12:33 PM Flag

    "the dividends amount to 10 quarters or $6.25"

    Using all my fingers to count, I say ten quarters equals $2.50, not $6.25.

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