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Reply to Percyvrance`s question regarding what happened when Vodafone sold Verizon in Feb 2014. I have finally found the details through my records and they were as follows: " For every Vodafone share held at close of business on 21 Feb 2014, shareholders have received 0.0263001 Verizone shares and will also receive US$0.4928. Vodafone has also completed a share consolidation and shareholders have received 6 new Vodafone shares in place of every 11 Vodafone shares previously held" The US$0.4928 per share was also "defined" / called a "Capital Payment" and NOT a dividend so one did not have to log it as a dividend and no taxation due.!!! Which brings me back to my questions this morning: Why can`t TSCO define the 51p as "Capital return / payment" ? Responses appreciated. Thanks.
RE: Share Consolidation on Ex-Dividend Day ?14 Jan '21
Gavster; Thanks for the analysis. I have one important question which may change things as follows: I assume TSCO can re-name / define the Special dividend and call it "Return of Capital" since I think they mentioned this word before. If it could be defined as "Return of Capital" (which it really is by definition), then surely for those investors subject to taxation, there would be no tax to pay since its not a dividend ? Please advise where (if at all) I have gone wrong on the above. Thanks
Share Consolidation on Ex-Dividend Day ?14 Jan '21
Will these be on the same day ? For me it's makes no sense to consolidate as it's all about market cap and a large SP driver will always be dividend level, but perhaps for more casual investors the share price remaining the same is a good thing.
Unless the holding is in a pension or ISA, then given that this dividend will be taxed, then the amount a shareholder receives will also end up being broadly 14% of the share price.
All basically meaning the special dividend is broadly priced in.
That all said, if the dividend level goes down by the same 14%, to 7.9p, then an equivalent SP with today's yield of 3.8% equates to a share price of 208p, add the 51p special divi equals 259p, so IMO, a rise to 260p is reasonable.
Will the normal dividend rise over 9.15p this year. IMO it probably will due to Tesco having increased its revenues.
Not sure if it was picked up by many investors of this sector yesterday but an approach was made to Carrefour by a Canadian company. Although the talks are at an early stage the French Government has stated that the largest private employer in France will remain French owned. Although OT, certainly worth a read as it may trigger some consolidation in the food retail sector.
Right, I think I almost understand this now. So.....The SD gets paid, the price goes down as usual accordingly. Then, the share consolidation happens and the holding goes down but price increases. The gamble is whether the price goes back up to previous levels factoring in the share consolidation?
Likewise Rosewall. I signed up for the max £500, 5 year SAYE on the basis that I couldn't find anything saying the price would be adjusted or affected by the consolidation. Best chance of making a tidy profit since the £1.50 offer after the accounting shambles IMO. As SAYE is contracted at a stated price from the beginning, with no mention in the contract of an adjustment I'm assuming it can't then be altered down the line. I could be wrong but that's my logic. Worst comes to the worst I can just cancel and take any contributions back or let it run and take my money back at the end if SP is lower then so can't lose either way really. Unless you count the minimal interest it would earn in the bank (though I doubt I'd religiously bank or invest £500 a month if it wasn't taken from my wage without me even seeing it!)
I agree with your basic comments. My wording in one area was pretty poor due to finger trouble and not being able to amend the post. When I wrote "This is strange", I meant to say that "This is a strange one," meaning it doesn't fit the usual special dividend scenario i.e. sale of asset, reduce NAV, pay investors. Essentially a return of capital. This is more complex and although both the positive and negative effects on the Balance Sheet are known, this will not translate into market sentiment, at least not at this point in time - there will be time to pick up cheaper shares later.
I did make more enquiries yesterday and have still not found anything that says colleagues SAYE plans will be affected by the consolidation - happy days if that turns out to be correct.
paddy, you have until the 11th Feb to research and come to your own conclusion. My reply is not intended to be dismissive but it depends on whether or not you intend investing based on other fundamentals or looking at a quick trade and gamble. There will be a share consolidation and probably a fall when it goes XD. I suppose you also have to consider is it worth buying with the expectation that it will rise as we approach the GM.
Good morning, pretty much on the nose with TSCO. I too thought the results were prices in. MRW had great xmas figures and fell on the news but have now regained some value and some. Now we have the run up to February 11th. As some have already commented, despite the bank lots of positives.
The online shopping is also limiting you to 95 items per shop. We often have to take items off our weekly order to fit to the limit. I do think they have opened online up to a lot more new customers and hopefully they will continue to buy their larger, heavier items online in the future.
The special dividend is already built into the price if you don't understand that then you need to read about efficient market hypothesis. When it is paid the price will drop by the amount of the dividend as the market capitalisation of the company will reduce. However Tesco are looking to fudge the numbers/graphs by conducting a share consolidation so the shareprice appears to be the same but there are less shares in circulation.
Disappointing Tesco Bank figures but expected. Well, a fall was expected, I didn't have a figure in mind.
Sales, well, they certainly reflect what we see day in and day out. Even now it is a case that online shopping is full to bursting. People are scared to go into stores. The upside of the priority slots are that there is a whole raft of new (and I would say grateful) customers out there. The downside is that the orders are often much smaller in value - the little old lady does not buy as much as a family of five.
Interesting ROI figures though. Not sure of the demographics and competition to know what has happened out there.
Special dividend will result in an initial fall in the share price, how much we don't know. This is strange because the sale proceeds from the two Asia businesses (one profitable, one loss making) will both reduce and increase the NAV. The NAV will not reduce by the total sale of the businesses, just the book value leaving a chunk of profit on the sale. The pension fund liability will be greatly reduced thereby bolstering the Balance Sheet and the remaining cash will be used for Working Capital.
As for consolidation, before the accounting debacle, from memory, the share price was around £5 per share. The company and institutions were happy with that and, again from memory, the company were making noises that they wanted to see it back up around that level. That is where I get my 5:3 ratio from. Pure guess work.
Yeah that will lift the shares ........oooooh like a dismal firework display gone out with a whimper . Still the Special Dividend to look forward to that will er push it up to 250 one would hope, Now will Tesco get rid of the god damn bank which is the white elephant in the room. Still at least like a bank your moneys relatively safe with a half decent dividend just don’t expect fireworks with this share