The Free Money Board

[Phoenix-Rising]

Thanks for the explanation. I guess it finally made it to the supervisor who basically said the same thing. I think Im done playing these unless I catch them early. The problem with that is sometimes they change there mind

Thank you for your e-mail.


We apologize for the confusion with this corporate action, and we apologize that our previous representatives did not explain this process fully. This is not the same as a regular dividend, so there are some differences.


When a stock goes through a reverse split, the ex-date does not work the same as for regular dividends. In this case, the ex-date refers to the split, but the cash buyout option, or any other offer, is extended to 'shareholders of record' on the record date (6/15/2009). Stock must be settled on or before the record date in order to be eligible for any dividend or corporate action. You were required to purchase the stock on 6/10/2009 in order to have been settled on 6/15/2009 (three business days later). This settlement period is an industry-wide Federal Reserve imposed process.



For regular dividends, the ex-date is two business days prior to the record date, implying that you would need to purchase the stock three days prior to the record date (the day before the ex-date) to be a shareholder of record and be eligible for the dividend. For a corporate action, you will often see that there is no record date listed, as in this case, implying that the record date and ex-date are the same. The split still occurs, and your shares are adjusted, because all shares and shareholders are affected on the ex-date, but any other offering is extended to shareholders of record on the record date.



In this case, you will not receive any cash-in-lieu of fractional shares because you have received a round 499 shares as a result of the two splits, the same amount that you purchased. In effect, the two splits cancelled each other out.