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I will hit this from a high level. Dividend investing comes in 2 forms
no share consolidation or with share consolidation.
1. Dividend & No share consolidation: This happens when a dividend is declared and issued the amount of the dividend (**will not impact significantly** decrease the current price of the share). It seems that you might have been better off with this one.
2. Dividend with Share consolidation: When a dividend is declared and issued and it **will
significantly** decrease the current share price by issuing the dividend. In order to avoid the drop in Share price the company:
- Uses an accounting treatment called share consolidation.
- This reduces the amount of shares you hold to compensate for the dividend.
-But your basically back at the original principal amount prior to investing
if you add your current dividend amount + the current share price, it should roughly equal your original principal amount. (granted the stock took a slight hit so far, so technically it would be slightly less).
Basics out of the way:
Either way, when a company issues a dividend, your current holding decreases by the dividend amount. Add your dividend + (the after dividend stock value) and it equals your principal amount.
**This is not investing advice, but I will throw you a couple of bones.
Q: In the current situation, since your stock holding has decreased in numbers,
and value to represent the paid dividend on the surface it looks like a capitol loss
but you were made even.
The basic premise is this: The investor must believe that the company's stock price will
rebound to the break even point (original purchase price + dividend) over a period of time.
How long no one knows, but the best way to look at consolidation plays - is a very long term view - take the dividend, divide by a period of time and this will give you an ROI time line. for example:
I loaned the company X (purchased shares & collected dividend) , over a period of 12 months my ROI is 1600 GBP per month (assuming the stock recovers to the break even point in 12 months time). This is a 52% rate of return ....(asuming the company share price returns to the break even point). Where else can you get this rate of return.
Your question comes down to a tax question. In S&S ISA's your not allowed to declare losses
(as it's all tax free...if i am not mistaken).
If you have a brokerage account, you will need to double check with an accountant, as the stock had a special treatment and given the info above not sure if it is an actual loss if sold? Any accountants out there????
Does anyone know how CINE has been performing from a P/L perspective for Q1 and rolling into Q2 of 2023? So far i have not gathered enough info to make a big picture assessment.
(maybe its buried in the court documents)?
Revenues - Operating cost = P or L
Future target operating model of CINE. Given the restructuring, significant reduction
in debt owed....
Wouldn't you think the revenues coming in would cover their operating costs and return
a monthly profit? Not sure how CINE's monthly global revenue numbers are looking so far.
But shareholders should be given a piece of the future co, or get paid a fair one time payment to walk away.
Yahoo picked up the story. Read it while its hot!
https://uk.finance.yahoo.com/news/cineworld-expects-exit-bankruptcy-protection-084902996.html
Please spread the article below. Shareholders need maximum coverage!
https://www.standard.co.uk/business/cineworld-to-exit-bankruptcy-protection-in-july-but-shareholders-move-to-stop-wipeout-plan-b1083623.html
CINE expects to emerge form CH 11 by July 2023.
CINE is still trading on the LSE. What does this mean for uk shareholders?
They keep saying no equity recovery, but how does this end for us?
CH is only binding in the USA not UK .... am I right?
Did anyone receive their dividend payment yet ? I did not. Looking forward to:
- Q4 dividend
- share price increasing
- cutting the fat at the CNE.l
** A hopeful future sell of the business that massively increases the share price, that helps us recoup our investment
We need to consult UK lawyers to see if current UK Shareholders have any leverage.
It appears that the Ch11 affects the subsidiary company in the US. Not sure how UK operations will be affected.
When CINE exits CH11 will the LSE still trade the UK shares? If we still trade in the UK, there might be room for a slight rebound?
Raising the 2.6b in equity, how will this impact current shareholders?
How can we get this to 7p per share? What kind of news needs to come out ?
Guys there has to be something we can do to salvage the retail sharholders here? Run on the stock like meme AMC... or fight a good fight with the London based courts or LSE.
We need ideas. We refuse to be steamed roll with the US plan that is not in our best interest.
Just looking for a fair and equitable solution for all.
Cant you see. CINE.l will rebound in the future... (far future), and we should be apart of it.
Even if 7 cents on the pound is returned. Any thoughts?
Remember, the old BODs are out due to a lack of performance and bad decisions. The RNS and white papers have the new BOD and CEO acknowledge this. They will take lessons learned and make different (hopefully better) decisions.
I say, sit tight and lets look at the quarterly numbers and financial performance,
then you can make an informed decision. Just remember below. Also the RNS and white
papers clearly indicate that the company will be positioned on the better side of the equation.
Thank god for MBA's and business school!
Revenue - Operating Cost = P or L
It appears your assumption is that CNE will only trade side ways or downwards. I am banking
on the stock going up in price as business's tend to do.
From a historical perspective, I was a CNE holder during the last dividend and consolidation about a 1.5 year ago. This exact same thing happened, and in roughly 14 months the stock rebounded and increased to my breakeven point of 2.40 GPB per share. I sold because I hated the old management. (not a fan of holding on to cash and not giving to shareholders... the tender was a stupid idea).
I think this stock has potential because:
- New BOD - with focus on returning excess profit to shareholders (Q4)
- 25 mil in share by back (will slowly help increase the price)
- internal cost cutting
You need to read the RNS and white papers. I think all the focus of the new BOD will
help the price of the stock increase overtime and we will see natural stock increase.
Revenues - Operating cost = P or L
If you dont see significant progress in the share price increasing there are always other
finance tactics you can deploy. But the premise remains in 12 months time the stock will
increase to your breakeven point, if not the ROI decreases slightly, by every month you hold.
But I personally think they are doing all of these actions in order to sell off in the future, and
then you would potentially get an even greater ROI.
Keeping this at a high level. ALL stocks drop by the issued dividend amount.
Your banking on the stock to recover to the total price of purchase in order
to relies the gain or dividend amount.
In cases where the total stock price will drop to much, companies use an accounting treatment called shares consolidation. This means they give you cash dividend, but your currently holding are also reduced by this amount. (reducing number of shares, and value).
In the end in both cases you are banking on the share price to rise to the total cost of purchase in order to relies your ROI. The best example I can give is below.
I did an assessment, and to invest this time around (I basically) loaned CNE.l some money
and if the share price return to my breakeven point in 12 months, I would have received
1,540 GBP for the 12 month period of time.
If the stock takes longer to recover then the monthly figures gets adjusted accordingly. Being that this is a long term hold and knowing:
- The BOD is big on dividends return to shareholders
- Q4 will bring another dividend (potentially)
- 25 mil in stock buy back (to increase the price of stock over time)
This is a good long term bet. Where else can you get a 52% ROI ?
Just to mention, Aviva and a couple of other companies did this.
The fundamentals are all the same. The company will give you free
money without equaling out your current position. Then time will be
your bet friend.
I know the BOD did stupid things like:
- Tinder offering to return Indian award (not tangible to shareholders)
- 2 merger attempts
- Not aggressively pursuing dividends in order give shareholders tangible return
That is why they are gone. I read all of the RNS and white papers, and the new BOD
has made it clear that they will operate differently...... or else they will be gone also.
All that happened is par for the course. This happened last time.
1. Ex-Dividend date comes
2. Shares owned gets reduced (consolidated)
3. The new value reflects dividend amount (so your getting 50%)
4. You banking on long term investment and price to recover to "cost per share" - this is your break even point
Cheer up... we have a potential Q4 dividend, plus 25 mil stock repurchase(which should increase the current value....
The last BOD did us dirty with a Tinder offering which passed on ZERO value to shareholders.
I think in time they will sell this company and thats when you can cash out. Think long term.