Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
I think the confusion arises as in this case a dividend isn't the direct result of the record date, B shares are issued as a result of the Record Date and thus the ex-dividend date.
The B shares are expected to be issued on Monday 16 May 2022, and the Share Consolidation will occur on the same date. The redemption and cancellation of the B shares is expected to occur on Tuesday 17 May 2022.
Payment is expected on 31st may in respect of these B shares, not ordinary shares.
LTI
Thank you for a civil response, I accept you may be correct, I am not suggesting I don't make errors, but my problem is with the RNS which clearly states a record date.
The record date is the cruicial date as the XD has a direct relationship to it and can for obvious reasons never be after the Record Date.
I think most will agree the record date is 13th May.
In today's market, settlement of stocks is a T+2 process, which means that a transaction is entered into the company's record books two business days after the trade.
To ensure that you are in the record books, you need to buy the stock at least two business days before the date of record, or one day before the ex-dividend date.
The B shares are expected to be issued on Monday 16 May 2022, and the Share Consolidation will occur on the same date.
I am baseing my post on the RNS, not a 3rd part website. If the RNS is wrong my post is also wrong.
LTI
Taken as a direct lift from the AV. RNS.
'The record time for entitlement to B shares and the Share Consolidation is expected to be 6.00 p.m. (London time) on 13 May 2022 in respect of the existing ordinary shares, and 5.00 p.m. (New York City time) on 29 March 2022 in respect of the ADSs (the "Record Time"). '
LTI
I respectfully submit that if you held on the 11th you will appear on the register on the 13th as it takes 2 business days to update the register, hence the XD date is the no mans land between the two.
The B shares are the same as a dividend in respect of registration.
hitman1a
I agree the record date is indeed the 13th May, however when buying or selling stock an investor doesn't instantly get listed and delisted from the register.
The ex-dividend date is the first business day before the record date, or to put it another way if you buy stock on the XD date you are not eligible for the next dividend, or in this case B shares. If you sell the stock on the XD date you will be eligible for the dividend (B shares).
To be eligible for a dividend or in this case B shares an investor must hold the stock at close of business on the day before the XD date. In the current case that was the 11th. If you sell the stock today (12th) you will get the B shares.
eurofox
I have been doing this a long time, I suggest a little more research before posting cutting remarks would be a little more civil.
LTI
Thank you for your response.
I am aware of the record date, however when buying or selling stock an investor doesn't instantly get listed and delisted from the register.
The ex-dividend date is the first business day before the record date, or to put it another way if you buy stock on the XD date you are not eligible for the next dividend, or in this case B shares. If you sell the stock on the XD date you will be eligible for the dividend (B shares).
To be eligible for a dividend or in this case B shares an investor must hold the stock at close of business on the day before the XD date. In the current case that was the 11th. If you sell the stock today (12th) you will get the B shares.
He has a lot to choose from.
LTI
Perhaps G59 just didn't phrase it correctly, and meant less value as oposed to smaller.
I see it like this and please correct me if you hold a different view.
If an investor held 1% of AV. stock before the share consolidation, they will still hold 1% of Av. stock after the share consolidation.
The company will still be the same size, with fewer shares in circulation.
The company will have less value, in exactly the same way that it has less value when dividends are issued. The company has value in assets which include its cash, when some of that cash is paid out, some of its value is lost until replenished by income.
Ideally we as investors shouldn't lose or gain from the share consolidation.
My personal view is that less shares in circulation will be a good thing over the longer term, depending on what they do with future dividends.
It may be that with fewer shares in circulation each share value is earning more profits, which could lead to slightly higher future dividends. The company is the same size, earning the same profits but fewer shares.
Or they keep dividends in line with current policy, and use the additional cash to increase company value, although I have no idea what that would look like or what form it would take.
I would be happy with either as a long term holder.
Its an exploration company that makes a loss, and like all mining exploration is high risk with many failures.
It will go up on positive news and down on negative or no news. It is purely driven on sentiment at the moment as are all stocks of this nature.
In 3 to 5 years we should know if its a winner or not.
In the meantime expect quite a lot of SP fluctuation, its the nature of the beast.