Financial 15 Split Corp T.FTN

Holy premium

[EdPaquette]

This has gone wacky, I wonder if many of these buyers are unaware of the upcoming consolidation.

[navgod]

Oh they are aware of the consolidation - "visions of divies dancing in their heads"- I just not sure they understand all the math.

[Larry50]

Perhaps someone could explain the math in a way those of us who don't understand all the implications can understand.

[alexallwin]

Hi, thanks very much for you guys comments. I also feel confused and if anyone can help me to understand better, it would be great. My understanding about the consilidation is: after the consilidation, the total money amount of my holding does not change, however, even if the total share amount get less, the divident distribution starts. So, this consilidation is a good news for us. Is it right

[EdPaquette]

If you have 1000 shares today, it will become 400 shares in 8 days.  Each will then pay 12.57 cents per month. 

[alexallwin]

Thanks Ed for your reply. However, still not very clear. So, today, I have 1000 shares at the price $4.27. Then, after 8 days, my 1000 shares become 400 shares, this part is clear. However, what the share price would be after 8 days? If the total money value keeps same, then the share price would be (1000 x 4.27)/400 = 10.675. Is it right? If this part is correct, and I start to receive divident

[EdPaquette]

Yup, that's right.

[navgod]

The real guestion is whether the premium over nav is too large even wiyh a dividend being paid. For example if the current nav is 13.50(a guesstimate on my part.then the premium would be (10.675-(3.50x2.5))/(3.5x2.5)= 22% or 28% based on FTN's high trade of the day. Personally this how i will decide whether I want to be long or short or on the sideline where I currently am.

[pjn0987654321]

The share price is scaled up.  They do not walk away with 60% of your money.     The dividend payment is calculated on the number of shares you hold after consolidation.   It's good news to be getting paid, but you should read the rules at Quadravest's website.  

[Larry50]

Yes, I think it's pretty well understood the share price is scaled up and yes, it's nice to receive any dividend rather than no dividend.  When is the price conversion calculated?  Lets say the shares convert and the rate at day of conversion is $10.  While there is never any guarantee in price direction I think there is a greater risk our new $10 shares will drop back to $8

[pjn0987654321]

I believe I read Dec 17 is consolidation day.  I don't know if it happens before open or after close.  My guess would be after close.  Then upon open on Dec 18, trading starts at the scaled up price of the 17th closing price.