RE:Distribution of shares ArrasIt will be a dividend in an accounting sense, but not in a taxable sense. For tax purposes, corporations can ony pay dividends to shareholders based out of their Earnings & Profits. Since SVBL has no cumulative Earnings & Profits, the "dividend" for tax purposes will be considered a return of capital, which is a non-taxable event.
What should happen is that your broker will determine what the closing price of the Arras shares are on the day of the distribution. Let's say they are valued at 10 cents a share and that your basis per SVBL share is $1. After the distribution, your basis in each share of Arras will be 10 cents and your basis in SVBL shares will drop to 90 cents.
That being said, I have been involved in similar scenarios whereby my basis remains the same in the distributing shares yet I still got basis (based upon closing price) in the new spinoff shares - in essense "free basis", which I didn't complain about!!
I honestly don't know how it will all shake out. All I know is that your total basis in both Arras and SVBL after the distribution will be at least as much as your pre-distribution basis in the SVBL shares.
Considering the recent market activity for SVBL, don't expect more than 10 cents for Arras shares, it could even be less. It would be nice for it to get a tidy boost as I am likely to divest myself of any of the Arras shares.