Spin-off Carve-out Stock Dividends

[Shamantiks]

Great to see you guys interested in divies. Can I even help mod if I don't have a paid Ihub subsciption? I'm on freebies here, hehe - I'd consider it but don't have alot of time to commmit, I should probably politely decline for now. The thread is at the end of my post, but I check Ihub alot and will keep you guys informed of anything juicy I find out about early. It's not a terribly active thread, but shows some of the history of last years dividends.

To answer some questions - I say the cash dividend will drop the price, because cash dividends automatically drop the share price on the pay date. Like posted, if over 25%, then the ex-date is on the pay date - the really important parts to understand are that cash dividends:

1) Automatically reduce the share price by the exact amount, the day it is paid. Therefore it is not free. A $7 stock paying a $3 dividend will start trading the next day at $4. It's not the market determining what the opening price is, it's the market makers. Look at TOPT or other big cash dividend adjustments.
2) Cash dividends are taxed the year you receive them.
3) The advantage to a cash dividend is, the shares are cheaper afterwards, and will draw in new investors.
4) I'm not interested in them unless they are huge, like 30% or more.

On stock dividends, yes, I like the OTC stock dividends. There are a few flavors, I rank them like this:

1) Forward Splits - SUCK. Beware of them, they are a RUSE on the pink sheets and OTC. Forward splits should only be performed by companies making earnings, like Wells Fargo. Look at ECFL and GWGO to see the effects of a forward split on a penny stock company, in most cases. Of course there are exceptions to every rule.

2) Common Stock Dividends - these are sometimes good, especially if they are restricted (and don't dilute the float for a year or more). These are shares pulled from the treasury, unlike a forward split where they are created out of this air, essentially.

3) Spin-Offs - These are my favorite. They are truly free shares in another company, usually a subsidiary. Almost always restricted for 1 or 2 years, not taxable until you sell. Most of them are almost worthless, too, lol. I only pursue 1 out of every 3 or 4 I learn about. Tread carefully, and look at LBTN to see a spin-off gone sour. Price from high of .0030 to .0001 in a couple weeks after the dividend, and then a reverse split on the dividend shares in SLSE.

I generally think the pink sheets are a black hole of pain and corruption. But some of the best action is with stock dividends, just don't go all in to any one, as you should consider them to be lottery tickets, dependent on whether your penny stock company survives the next year of naked shorting and flippers.

http://www.hotstockmarket.com/forums/showthread.php?t=38924&page=38&highlight=dividend