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The "market" is a fluid ever-changing phenomenon not a fixed value in time. Zero sum thinking never applies.
It's hard to say what will happen the SP EX div, my intention has always been to sell prior to ex div, maybe even on this Thursday's results, but I can keep an open mind as things develop .. a few investors splashing out big money today, hopefully a good sign ..
Why before then? Just keep your cash and pay yourself the dividend?
Any "premium" was factored into the share price as soon as it was public knowledge. i.e. if the "market" thought it was a good deal the share price rises on the announcement. (Or prior to an announcement if it was expected)
And yes, once a stock goes ex Divi it's price drops by the dividend amount immediately. (When it goes ex Divi existing share holders are entitled to the dividend at a point in the future even if they sell their shares before this)
It doesn't make any difference whether a dividend is paid from sale of a bit of the business from normal earnings or even extra debt the companies takes out to specifically pay a dividend.
Share consolidations won't make you richer or poorer either. You can't create value of think air.
When a company acquires another or (part thereof)of a profitable company a premium is normally attached to the purchase price. This sale of the profitable Tesco Asia business is no different....take the premium!
Thanks leas Re: ex divi date, was thinking of topping up by then
As the special dividend is being paid out of funds coming from the sale, in theory, it shouldn't drop
It will be 51p, no share buyback but remaining cash from the Asia sales will be going to the Pension Fund. It may well drop by 51p but then again you could see ‘new money’ coming back in who did not want to pay any tax on the SD payment.
Also have to remember the regular dividend payable later in the year .
I'm fairly new too but my understanding from reading other, more experienced posters is that, if agreed by shareholders:
1. Yes, there'll be a special dividend of around 51p
2. The share price could well drop by up to a similar amount.
3. There'll also be a share consolidation at the same time, effectively lifting the share price up again but reducing your number of shares held.
4. If you let the special dividend automatically reinvest, you'll likely not end up hugely better or worse off.
5. If you take the dividend as cash, your holding will be worth less, most likely by a similar amount but you'll have the cash to draw on, reinvest at your time of choosing or invest elsewhere.
I could be wrong, but that's what I understand and not expecting to be any better or worse off solely because of the special dividend once the dust settles. Don't know whether the best option is to automatically reinvest or take the cash and reinvest manually though. Would be interested to hear others' views on that.
I'm no experienced investor so feel free anyone to correct me if I'm way off the mark.
HI, do we know that the divi will be 51p ?????
might the return to shareholders be part cash divi and the rest share buy back ??
Im new to all this and cannot believe we will get such a huge dividend .
On the 11th Feb :)
How many more times for this question ? Try looking at the 4th page and all will be revealed
when does this go ex div please
I added another 22k shares today, It was a toss up whether to stay in BME for the 20p dividend on 14th or buy more TSCO. Fortunately BME has jumped 50p since Xmas which is enough for me to sell up shift it in here. Hopefully a great set of TSCO results on 14th will be icing on the cake.
I’m still undecided whether to hold for the special 51p dividend in February..
yip, even then!
With a fair wind, the share should rise this week with stellar results. Good rise on the day and then grow to the SD but will drop off the morning after it goes Ex Div ( 11th Feb? DYOR) the question is will it then recover so you end up with a 51p dividend in cash per share and hopefully a share that will recover as its low and the balance sheet and share consolidation will make the SP look cheap in comparison! im tempted to pile in here but dont have huge amounts of spare cash as another share im in will have a similar Trading update on the 14.1 and when ever i pick sides i lose....
Imagine you owned something that said you are entitled to a pot of cash which has a value of £100. You can sell this at any time.
Now imagine out of that pot you get paid £5 right now leaving £95 in the pot....
So now you have a fiver in your hand and you can sell your pot for 95quid. That's all the dividend is and that's what it does to the share price.
The latest industry figures from Kantar show total grocery market growth of 11.7% to £11.6bn in the four weeks to 27 December, with sales of grocery goods jumping 13.6% among supermarkets and dedicated food retailers.
Kantar’s four-week market figures seen by The Grocer show almost all of the major multiples in double-digit growth during the period.
Tesco, which has yet to officially report its Christmas figures, was the leading big four player, with grocery growth of 14.3%, followed by Morrisons at 14.1% and Sainsbury’s at 13.8%. Asda was the only big four player to lose market share over the period, with growth of 9.8%.
Simple equation I think. Asia business worth c13% of profits but special divident worth 20-25% of sp so I reckon we will see net value gain of c12% plus the results for Tesco are gonna be mega. Expect a 5-8% up day IMO. The markets are mad so who knows
F#ck it .....just topped up.
Even when the funding is coming from the sale of assets?
Think I will wait till after divi to see what happens and hold existing shares.
All dividends come straight off the share price
I was told special divi would come straight off share price.
Nobody knows what the share price will be after the special dividend. I have forgotten what the NAV per share is represented by the Asia businesses. Also, we do not know what the effect of share consolidation will be.
I added more today. Whilst the sp may go down on div we take cash back to reinvest elsewhere. The divi of paid at historic levels relative to new sp will be one of the highest in ftse thus attracting much more interest. Don’t forget many retail investors out there don’t understand shares, will see the drop in sp and see this as a buying opportunity. I wouldn’t be surprised to see the sp in the low to mid £2s after ex div and everyone will be kicking themselves for not getting in