Tellabs Inc. (TLAB)

[detearing]

I spoke with Fidelity and they said you can still buy up until Dec. 24th and still get the dividend; however, do you own dd as this stock is majorly screwed up in terms of getting accurate information to the investors.



Tellabs's Early Stock Trading Roiled by Dividend-Date Confusion 12/12 10:29 AM

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Confusion about a special dividend being paid by Tellabs Inc. (TLAB:$3.32,00$-0.03,00-0.90%) sparked stock swings in heavy premarket trading of the company's shares Wednesday.

Traders said some market participants likely mistook Wednesday for the so- called ex-dividend date. Prior to the ex-dividend date, shareholders are eligible to receive a recently announced $1-a-share, one-time payout. Buyers of the stock on or after that day aren't eligible.

Dec. 24 is the ex-dividend date, according to Nasdaq OMX Group Inc. (NDAQ:$24.31,00$0.88,003.76%) . But traders said some market-data providers indicated Wednesday was the ex- dividend date. Several news outlets distributed the erroneous information, causing confusion in premarket trading, said Tom Scottino, Tellabs's (TLAB:$3.32,00$-0.03,00-0.90%) senior investor-relations manager.

Typically, a stock goes "ex-dividend" two days before the dividend is paid. But the size of Tellabs's (TLAB:$3.32,00$-0.03,00-0.90%) payment makes it subject to a special rule that allows investors to remain eligible up until the date the dividend is paid.

Reaching the ex-dividend date could drive a stock price down, as shares thought no longer to convey the rights to the payout would be less valuable.

Tellabs (TLAB:$3.32,00$-0.03,00-0.90%) shares dropped to as low as $2.35 in premarket trading, down 30% from its previous closing price, before rebounding, according to FactSet. Stock exchanges reviewed some trades for potential cancellation but ultimately let them stand.

"A lot of the data sites still had the ex-dividend date listed as today," said Larry Peruzzi, managing director at Chicago brokerage Cabrera Capital. "People, preopen and shortly after the open, were trading on the belief that this thing should have been trading down, because they thought it was ex-dividend, and it wasn't."

Under an exchange rule, the ex-dividend date for large payouts--those representing 25% or more of the value of the underlying security--is the first business day after the company has scheduled to send the payments. Tellabs's (TLAB:$3.32,00$-0.03,00-0.90%) special dividend applies, as its payout is $1 a share, and its stock has traded around $3 in recent weeks.

Tellabs (TLAB:$3.32,00$-0.03,00-0.90%) shares were down 0.3% at $3.34 in early afternoon trading.

Write to Matt Jarzemsky at [e-mail] and Ben Fox Rubin at [e-mail]

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12-12-121329ET
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