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I'm taking the SD proceeds on 26 Feb and looking at the wide open market for another "low Covid share price" rather than be forced into buying back my Tesco holding shortfall. Unilever looks a very safe bet! Let Tesco compete with the other titan market capitalisers .....
Btw those that have sold out pre consolidation have lost out on the "no drop in share price" gain and subsequent promising final divi in Early July.
ECR
''rather than be forced into buying back my Tesco holding shortfall. ''
you haven't got a shortfall. The number of shares that make up the market cap is irrelevant.
You retain exactly the same percentage of Tesco, it's only the value of that percentage that has decreased due to the fact that money has been taken out of the company and given to you.
A reinvestment of the proceeds would increase your percentage ownership of Tesco over what you had before.
Btw those that have sold out pre consolidation have lost out on the "no drop in share price" gain and subsequent promising final divi in Early July.
Am i missing something I sold 1p above current price and can buy back in for July divi anytime I like ? I probably won;t as I dont trust this SP not to slither down back towards 2.07...it shouldnt but it shouldnt have before
oops 10p above current share price
Now 2.35 strewth I'm not invested here currently but this should be 3.35 ! What is it with this Share ? One of the few companies to be trading like no tomorrow in the weirdest economy since ww2
Good morning Spindler,
It's uncharacteristically quiet on this board this morning!
To my simple mind you're not missing anything. I'm inferring from your posting history that you sold out of Tesco completely, some weeks ago. Assuming that's the case, then:-
On the upside:-
(i) You've avoided any potential income/dividend tax implications from the Special Dividend.
(ii) You got out at a favourable price compared to today's price.
(iii) You save enough to compensate for not receiving the Special dividend by now only having to buy fifteen-nineteenths as many shares to restore your full position wrt "normal" dividends going forwards.
On the downside:-
(i) You may have incurred dealing costs (depending on type of brokerage account/platform) to sell, and you may incur dealing costs to buy back in.
(ii) You will incur Stamp Duty charge to buy back in.
To me, it's as simple as that.
Mike.
It is good to see the share price declining, hope for it to continue a while longer. Will reinvest the special dividend and, at these prices, may become better off than pre special dividend and consolidation.
When you do the maths, there is absolutely no advantage to the SP decline except perhaps a that re-investing the dividend will give you more shares. The special divi and 15 for 19 shares evens itself out and in theory, the SP reduction should have been zero. Must be market forces at work.
Don't like to have an uneven amount of shares as I currently have in my ISA, but haven't sufficient cash in the isa today to make a further purchase.
May contemplate a further purchase outside ISA if this drift continues.
There are many ftse 100 companies that are suffering the same fate as tesco .. some started a month ago. A lot of value shares. I will wait for end of week before buying any tesco share.
2.29 Strewth never figured that that quick....i just dont trust this share
Tesco's managements "magical formula " for future success is sending me so so dizzy. The last time I felt this unwell was as a kid on a fairground waltzer that went out of control. Do you think they are playing mind games just to liven up a dull part of the calender year? lol
MPH
Mike You put it clearly and lucidly. "Simples" - as meerkat Auto Sergia says. Is it something good you are taking ?
LTI
The Mrs is badgering me to buy her a new I phone 11 Pro. Do I reinvest the Tesco SD back into Tesco, or save myself from a premature death ?? lol
ECR
Buy the phone.
It is not worth having an increased Tesco shareholding if you are dead.
although if you purchased more shares in Tesco and they subsequently increased in price, then upon your death Mrs ECR could then sell - buy herself the phone and have enough left over for a good pizz up at your wake.
Could leave these choices to Mrs ECR.
but option one would be best for you
LTI
I will consult my solicitors, Earnmore, & Ripponhoff. Ive fired the stockbroker.
Well when you get the BS SD if the SP keeps dropping and you reinvest it all you are actually going to end up with more shares than you started with.
LTI
"could leave these choices to Mrs ECR"
Holy Hell LTI !! Not your your Aunt Nelly. As soon as Ive gone, she will clean my bank account out lol
But reinvesting and acquiring more shares that are dropping in price is a lose lose just like Vodafone when they sold Verizon
the share price has never risen only dropped, because they offloaded a valuable asset and dished it out to shareholders whilst doing a share consolidation at the same time. The only plus was that you could have Verizon shares instead of cash.
st
''the share price has never risen only dropped''
At the time of consolidation the share price of Vodafone was about 228p.
I subsequently sold some Vodafone on the 26th May 2015 at about 255p, so it is wrong to say that they only went down.
Most shares go down as well as up.