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To those in the know:

When NTE announced a special dividend of $0.80 per share, great, thats money in the pocket (100 shares x $0.80 / share = $80).

Then they gave us a special dividend of 1 share per 10 you own, or a 10% dollar bonus (in the form of more shares). If I owned $1000 worth of NTE, then I thought they were giving us $100 (in the form of more shares). But if the stock price is adjusted downward by 10%, isn't this essentially an 11 for 10 stock "split" and there is no "special dividend". Am I correct about this???

Curiously,
David
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Danish and David:

Did'ya hear about the guy that walked into the pizza parlor to pick up his pizza, and the counter clerk said, "How do you want that cut? In 8 pieces or 16?"
The customer replied, "Better make it 8. I don't think I can eat 16."

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Q: So, would you like your $399.00 pizza cut in 11 pieces or 10?
A: 11, where each piece is worth $36.27.

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Correct. Size-wise the pizza is the same, as both of you said.
In fact, as near as I can tell, you were right in everything you said!
As David said, it seems to be handled like an 11 for 10 split (a messy business).

Now at the pizza parlor, just as we sit down to eat, before we have taken a bite, the candy man comes around to the tables and says, "I'll give you a piece of candy for every piece of pizza you have there."

So, what we pick up is that extra piece of candy. And this 1 extra piece of candy (which we did nothing to deserve), continues year after year -- as long as the candy man continues to pay out candy periodically.

Since I have NTE in both my two brokerage accounts, I'll wait and see how they each handle all this, before I put my official seal on this post.

How does this explanation sound?

Larry


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Maks sense since future dividend payments will not be "split", but we hase 10% more shares.

Also makes me hungry.

Thanks!
david
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So, what we pick up is that extra piece of candy. And this 1 extra piece of candy (which we did nothing to deserve), continues year after year -- as long as the candy man continues to pay out candy periodically.

I think the candyman isn't passing out candy. He's passing out toppings per slice, but he's taking them from your pizza and shoving them down your throat.

If a company pays 10% dividend, then that 10% comes straight out of our stock value and into your pockets. I think it's more like force-feeding. Except that there is probably overhead involved and paper work in splitting the stock and so if a company pays out 10% divendend then it's going to cost you more than that in the stocks value right? Unless there is some extra psychological value added in the process.

rruyy
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Well, rruyy is right about this aspect:
There IS a Santa Claus, and he is US!
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On the other hand, maybe the employees aren't going to get as big bonuses because we stockholders got it this year, so the employees are the Santa Claus this year.
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When I am the 'employee', I want EMPLOYEE's rights, not SHAREHOLDER's rights. Who cares about them shareholders anyway?

All they did was PAY for the dance. As a employee, I'm the one that keeps the dance going, and keeps the dance partners happy.

But as a shareholder, I STILL see things that way! Mr. and Mrs. Management, keep those employees VERY HAPPY, and it'll all show up on the bottom line eventually.

How'd I get off on that?

Larry
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