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billyboy56...8:39 post
Hi,you are correct,we would be slightly worse off by accepting SD whilst keeping current shares that would be consolidated.By doing so there will be reduced number of Tesco shares in issue.Can though anybody be sure that the newly consolidated shares' price will rise by the SD price?i think its a gimmick played by the Company BoDs.Stach
Folks, this is not a special dividend. It is very misleading calling it a dividend. This is returning £4.987bn to shareholders from the asian sale by way of a capital payment/share reduction. Has the same effect as if you went and sold 21% of your existent shares. On the positive side the company paid £2.5bn into its pension scheme so arguably it is a better company now that before. But alas a special dividend windfall it is not.
Any one have the number for Couche-Tard?
If the current share price post-consolidation is exactly the same and we assume it's 240p (for my simple maths). Some will be marginally better off and some marginally worse off. It depends on your fractional entitlement which you will lose as it's being given to a food bank charity.
I will lose 0.105 of a share, but be marginally better off. However if you hold, for example, 1000 shares you will lose nearly half a share and be fractionally worse off.
In my case..
Current holding:
15,000 shares @ 240p = £36.000
Post dividend and consolidation:
15 for every 19 shares = 11,842 shares @ 240p = £28,421
plus 15,000 times @ 50.93p dividend = £ 7,639
Value = £36,060.50
Of course all this assumes the share price will be exactly the same after the ex-dividend date.
I'm a long-term holder in TSCO and will continue to hold, but if I didn't hold my shares in an ISA I'd be very tempted to sell now and buy back post-consolidation to avoid all the unnecessary hassle and tax calculations. I think this is why the shares are under-performing peers at the moment, but should hopefully redress the balance if and when people buy back in. Please DYOR.
Ah thats good then Rosewall
This article goes some way providing and explanation. https://www.investopedia.com/terms/s/specialdividend.asp
PH
If the money had been used to buyback shares in the market for cancellation then that would have had the effect of an upward pressure on the share price
PH
''Which should drive the price up to nearer £3 in the short term.''
The market cap is being reduced by 50.93p per share
Please correct me if I’m wrong.
The share consolidation is reducing the number of shares in circulation by the same amount of the dividend.
There will be 20% less shares in circulation?
Which should drive the price up to nearer £3 in the short term.
Very high level: The value of a company is assets - liabilities + an estimated value of future profits.
What happens when a company pays a dividend... cash decreases i.e the assets go down therefore your market cap goes down. the rest (share consolidation) is just noise. The market will decide what the market cap should be and adjust it very quickly.
Earnings per share will be higher which will or should attract more money from the city. Will be interested if the yield will increase by the percentage number of the share consolidation. A yield of about 4% has to be attractive to any investor especially when all that money is sat in a bank account earning nothing.
I guess those private investors that thought buying in the short term just for the SD will move on and the institutions mop up those shares a little cheaper.
I agree with billyboy56, shareholders lose on this deal based on today's SP at start of trading.
Billy boy
The consolidation happens AFTER the special dividend and your ownership of the company does not change
Sorry my maths are **** looks like your 70 p better off for every 19 share you own lol
Or are you better off
Looks to me after consolidating you are worse off or is it me ..say you have 19 shares at £2.45 which is worth 46.55 add special dividend =56.05 take your 19 shares down to 15 so your 15 shares are worth 36.75 plus your 9.50 for special dividend equals 47.25 so you are worse off are you not.??? Correct me if I'm wrong
RW thanks, need something that holds it's price and maintains it's dividend in times of crisis, and we have had plenty of them lately
Gary
I have left my opinion on the LLOY bb which is likely to go down like a fart in a spacesuit (thanks Big Yin) :)
Nigella
I kind of agree with you. Staff bonus was pretty much the same as that which is issued to shareholders and I have no real problem with that. Not overly impressed with the yield but my main concern with BME, Home Bargains and The Range, it is neither one thing not the other. FWW was similar, also M&S but it is a well run company and they know their stuff.
Robleo
Both. The SD is worth investing. It is a return of your money, the sp will be adjusted one way or another. You shouldn't lose money, Tesco will be around for a while yet
I like BME . B & M european retail . ftse 100 good dividend payer . Plenty of specials if they do well . They are currently thriving . More importantly they have gained a lot more new customers from the traditional supermarkets.And are deemed likely to keep a good percentage of them .So future looks bright. They even gave all 30,000.staff a full weeks wages as a thank you bonus for Christmas .
Thanks for feedback.
Hi guys, do you think now is a good time to invest in tsco, or do you think their will soon be a big drop in the sp
cheers
a bit like some Lloyds shareholders complaining that the BOD have not spoken up about dividends when everyone should know that dividend details at the latest will be given with full year results next month.
Also, everyone will be contacted when they will be eligible to get a C19 vaccination.
No need for people to keep phoning a GP's surgery.
RW
'' simplified details of what the SD and consolidation means''
Another poster of here seemed to suggest that the option to purchase shares under a scheme just maturing won't be until after the proposed return of capital and consolidation in any case.
Everyone already knows that each shareholder will be returned about 50p per share if approved which will be payable in February. Details of the consolidation ratio will be known as early as Monday. Sending emails was not necessary as all relevant information will be conveyed to shareholders and interested employees very soon.