Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
My Tesco shares were 215p each. My understanding was that in the consolidation the shares would be reduced 19 to 15. What I didn't realise is that the "new" shares would be "sold" to me at the closing market capitalisation rate meaning that my unit cost is now 273p (according to HL). This means on current share price I am 10% under water. I realise we have the Divi to come (not showing yet in HL) but I feel a bit cheated. My own fault for not really knowing what would happen but leaves a sour taste for this LTHer.
There is no cost.
Instead of you having z amount of shares at about 190p you have y amount of shares at 240p.
190 x Z being equal to 240 x Y
Longtime there is a cost as far as the share portfolio on his HL screen is concerned.
Atanasoff purchased shares at £2.15. To keep the maths simple let’s say he purchased 380 shares at £2.15 so the cost was £817 or average cost of £2,15 per share.
After consolidation he has 300 shares so his average cost per share is £2.72 (£817/399 shares)
So with the share price at £2.40 he will be showing a loss of 10% £2.72 avg price per share vs share price of £2.40.
In terms of total value of his holding he now has 300 shares at £2.40 each so it’s £720 a loss of £97:versus his original purchase of £817.
The special dividend will be his original 380 shares x 50p so he will receive £190 which means he hasn’t lost out on the deal but his portfolio will still show it as a 10% loss. If he spends the special dividend on shares he will get another 79 shares meaning he has spent £1007 (£817+£190) on his now 379 shares giving him an average share price of £2.65 which will still show as a loss on a per share purchased basis on his portfolio against the £2.72.
Thanks Pmoran - that is the way I see it.
I had 1462 shares at 215p = £3143.30 so this showed a healthy profit around £395
I now have 1154 shares. That averages 272p.
"Loss" is 57p per share.
The market should be reflecting the lower number of shares in circulation but the current price is 243.45p so 28.55p "down".
I get a special divi that, lest we forget was not meant to impact the share price, on the 26th Feb of 50p so £731. This means the nett figure is +£6.53. before tax. After tax it will be negative as it is being paid as a divi. The problem is that I will still be showing a greater loss on the dashboard because even if I put the divi in (old profit+divi+£6) I will still be down as it won't average down enough.
In other words the special divi from the sale of a large chunk of the business has had a negative effect on me.
I am hoping that the share price goes up to reflect the smaller number of shares. £3+ should be in order.
£3 + ??? Dream on. The only consolation is I’ve been burned more than you.
Pantherm100, you *not* been burned.
Did you read Tesco's RNS, as I suggested in an answer to another of your posts, where it makes it absolutely clear that the 50.93p dividend is on the number of *old* shares, not the number of new shares?
Mike.
p69
''but his portfolio will still show it as a 10% loss.''
If someone bought 10,000 shares in a company at 110p per share the day before it was going xd with a dividend payment of 10p, I think you will find that on xd day the portfolio will show a loss.
I'm fed up with so many people who do not know the simplest of basics. I suggest to these people, learn a bit or stick with cash.
Think most understand how dividends work. The whole idea sold was we would get a gain from the sale. In reality, no such gain is apparent. Where has the money gone?
241 minus 51 equals 190
“I'm fed up with so many people who do not know the simplest of basics. I suggest to these people, learn a bit or stick with cash.”
Lti - I am fully conversant with how dividends work but the point I made in my original post was clear. I answered atanasoff’s question and explained that the total value of is holding plus the special dividend resulted in a net gain but because the consolidation of shares recalculated the avg cost per share paid it shows as a loss on his portfolio even when the special dividend is reinvested. It’s just because of the way his portfolio is displayed by his provider using a average cost per share paid.
By all means get fed up with people who don’t know the simplest of basics mate but instead of just telling people they are stupid perhaps you could try to answer their question in a way that they understand. Thankfully atanasoff’ did understand my response.
p69
''but his portfolio will still show it as a 10% loss.''
If someone bought 10,000 shares in a company at 110p per share the day before it was going xd with a dividend payment of 10p, I think you will find that on xd day the portfolio will show a loss.
I'm fed up with so many people who do not know the simplest of basics. I suggest to these people, learn a bit or stick with cash.