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A Question on Special Dividends (TLAB)
Posted on 12/5/12 at 11:28 am
Posted on 12/5/12 at 11:28 am
So I was just skimming through the business section at work and noticed a piece on companies paying special dividends at the end of the year.
Well, I noticed Tellabs (TLAB) was one of the companies participating. They are offering a $1.00 dividend for shareholders as of December 14. The company is currently selling at 3.37. If I bought 300 shares, and held through the 14th, would I receive $300? It almost seems to easy. I have to be missing something.
Here is a link explaining the dividend...
LINK
Well, I noticed Tellabs (TLAB) was one of the companies participating. They are offering a $1.00 dividend for shareholders as of December 14. The company is currently selling at 3.37. If I bought 300 shares, and held through the 14th, would I receive $300? It almost seems to easy. I have to be missing something.
Here is a link explaining the dividend...
LINK
2
Posted on 12/5/12 at 11:32 am to OnTheBrink
The stock price will drop by the dividend amount on ex-dividend date. So you really gain nothing and have to pay taxes on the dividend. The market is far too efficient to allow such a simple arbitrage in my opinion.
This post was edited on 12/5/12 at 11:33 am
Posted on 12/5/12 at 11:44 am to OnTheBrink
As long as you buy before ex dividend date and don't mind paying trade commission, dividend tax, incurring the potential loss if the stock goes down once you sell or the possibility of capital gains tax when you sell the stock. It' s up to you. 
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