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Mane
I would say that there was a last minute sell off, with people worried about tax - resulting
in about a 9p drop, which is why I purchased on Friday.
credit given to me yesterday on a Tesco SB position held in my IG account
I assume as long as you bought in oringinally below 2.43ish you shouldn't be out of pocket but before I rush to buy back to my original position I wonder how much of the increase in SP recently was driven by people expecting some sort of pay out?
Or, the special dividend is cancelled by the reduction in shares held post consolidation. In short to effectively stand still you probably need to reinvest the SD via DRIP so that you end up with same number of shares pre SD/Consol with a small gain which SHOULD (see "jam tomorrow" comment earlier) generate greater future dividend payment due fewer shares / same or increased divi pot scenario. Depends which way you want to cut it... but bottom line is, you didnt get the SD in full as you lost 25% of holding at same time. Its again your choice if you accept that SP would have fallen by 51p on EXD argument and would now be holding same no. shares at approx 190p ....... Tigra's needless muscical chairs comment is a fair assessment...... All i looked at was what did I spend initially on TSCO shares, then I recalculate my new holding at todays price (244p) and add my SD to the total. As its approx £600 above my initial spend I consider myself marginally happy, but would have been happier with the full 51p SD of course, but accept I would then have to live in short term with a SP fall on EXD calculation. So, it really is a personal position at the end of the exercise and tinged with do you expect SP growth and better divi's in future (same for all investments am sure!). The only impact i dont comment on is the tax position , as it should be in an ISA or SIPP wrapper if a sizeable amount. My focus now is past SD/Consol and what will upcoming reports show as trading results and will this make up for the SD/Consol shenanigans ......... lets hope as I am sure we will all have holidays in the sun to pay for !
Just to make it clear to relatively new investors - If a company pays a dividend (special, ordinary or final or even quarterly) then the share price would ordinarily drop on ex dividend date. The day before ex dividend date is the qualificatiob date which is the last day you have a chance to a right tp the dividend.
The share price does not drop after "payment date" because the adjustment downwards in market capitalisation has already taken place on the earlier ex dividend date.
The downwards adjustment in share price occurs in the case of NO consolidation. Normally special dividends do not involve share consolidations. But this is not the case with this Tescos SD - so no reduction in share price.
As others have said. the share price could well rise if enough Tesco shareholders want to reinvest their SD to maintain the level of their pre consolidation holding.
I hope this makes it additionally clear for our newer investors who have not experienced the rarely occuring SD/ consolidation issue previously.
DT#
Quite right. Not many high yielding companies on the footsie if the banks continue to withhold dividends due to government guidance. Pension funds looking at covering annuities.
Leas - I agree. I think this was a driving force when the BOD were making decisions about what to do with the Asian sale money. If the dividend payout increases and we become a 4-5% yield stock then we become very investable for the big ii’s - especially as there should also be organic growth in the SP purely based on trading performance
Well put Risewall.
Don't know about anyone else but I've just bought back to my previous holding, can't be doing with a strange number of shares, I suspect many will do the same.
see my earlier posts regards robbing Peter to pay Paul. The SD actually isnt as you lose 25% of your holding going forward. The share price hasnt moved from its 240-245p range pre/post consol. So its how you cut your numbers. Some advise that the SP would have fallen on exd by same amount of SD which is hwre the 189p figures come from, but SP was maintained at approx 243p, so there is a "win". There are a number of "jam tomorrow" statements regards dividend increase as fewer share in circulation share same/bigger divi pot, and the beter financed organisation should be more attractive to investors and hance see SP gains . Your choice if you go with jam tomorrow. My concern is that despite all the thousands of posts on this consol / SD episode, the market will dictate te SP and hence the effect all this has had personally. The bottom line remains that you dont get the full SD in your pocket, you reduce the SD by the effect on your holding at todays price.
example pre SD/consol 2550 shares held at £5610 purchase price (thats my profit / loss line). Post SD/Consol 2013 shares at 244p = £4911 PLUS £1300 SD = £6211 - £5610 = £601 profit ON INITIAL OUTLAY. However, again the issue is DRIP or CASH take. If cash, you are then open to holding fewer shares and hence possible lower future dividends. Its a marginally better than standstill position and I for one wish BoD at TSC had been so much clearer on the netting out final position. Hope that helps clarify.
bluerose (and others)
You, and only you, are responsible for your investments and tax situation. There can't be many investors who are unaware of the ISA and SIPP tax wrappers. If you are having to pay dividend tax then it is yours, and only yours, decision not to mitigate and tax disadvantages. There should be no one paying dividend tax. If you had used up your ISA allowance then you can pop it into a SIPP. This deal was announced in March 2020, almost a year ago. Every investor has had a year to resolve this, there really isn't any cause for complaint.
so really tigera the drop in the amount of shares is off set by the special dividend
mike sorry typeos all over the place, so the divi makes up for the consolidation as such, I lose 2,200 in shares but gain a special divi. robbing Peter to pay Paul as such
Not forgetting with less shares in issue, so earnings per share will be better and the likelihood of a dividend increase reflecting the consolidation ratio. I would be disappointed if the pay-out was less than 10p per share.
sorry too new phone bought at 2,43
Sydney2021,
You say "I bought 10,000 at 3,10 week ago".
That can't be right. They haven't been above £3-00 for the last several years.
If you go to the top of this webpage, and press the button where it says "TSCO Share Charts", then you can select a 5-year timescale.
Mike.
Exactly. That and the improved financial positioning of the business are the things to drive this north over the next few weeks.
Is surely now how much of investors SP will be reinvested on or around feb 26th? If you consider £0.51 has been given back to shareholder if 50% of that gets reinvested then we could see the share price at £2.70 by the end of next week / early March
Hi Sydney2021,
You should have 7,894 "new" shares. Multiply your "old" holding by 15, and divide by 19. That makes 7,894.736 but unfortunately you lose the .736.
Plus you should get a dividend of £5,093 (gross of any tax you might then owe) which you should receive on or just after 26 February.
I hope that helps.
Mike.
if I bought 10,000 at 3.13
and I get 5,000 dividend
and now I only get 7,894 at 2.46 , that means I walked in to a $6k loss?
Hi Sydney
If you pop into your online account then you will see the effect. Essentially divde by 19 and multiply by 15.
7890.
Samson,
I bought 10,000 at 3,10 week ago. for 33,000. so the divi get is 5,000
not sure how many shareS I get though?
I am sorry I am been really thick I have 10,000 shares before consolidation, how many do I have now, I bought them for around 3 pounds before consolidation
samson123,
"Which charity have I donated to?"
It goes to Trussell Trust (forgive spelling if wrong), for foodbanks.
Plus the charity via any tax on dividends is "UK plc"...
Mike.