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posted on 31 Oct 2017  -  30,481 views
Recently, several users have independently highlighted to me the issue of delisting dividends.
What are delisting dividends?
I am referring to dividends that are given when the stock is delisted, redeemed, or cancelled. These dividends usually have a dividend yield of ~100%. However, note that not all dividends with ~100% dividend yield are delisting dividends, for example:
8Telecom's capital reduction dividends.
What about them?
Previously, StocksCafe simply listed all these delisting dividends and considers them as dividends. However, it was highlighted to me that this is not appropriate because it would skew the computation of P&L. For example: If I buy stock A for S$1 and receive S$1 as dividends as it gets delisted, I would have to set that I have sold it at S$0 to make it balance.
Although it balances out, if we look at "P&L + Div", it will make "P&L" negative and "Dividends" overly optimistic.
What do I need to do?
I agree with the suggestions that delisting dividends should not actually be considered as a dividend. Hence I have removed all delisting dividends from StocksCafe. This means that if you have sell transactions of price 0 because you depended on those delisting dividends to balance the account, you would now have to edit the sell transaction to whatever you received.
There are a total of 43 affected users. You can use
this link to see if you have any sell transactions at $0.
Let me know if these changes affected you unexpectedly or if I missed out any other delisting dividends.
Finally, thank you all as always for helping make StocksCafe better. Due to time limitations, I might not always be able to work on reported issues immediately, but I will get to it one day. Thank you for your patience :)
- Thanks for keep improving Stockscafe
31 Oct 2017 17:53:33
- Yup, the data looks funny. I overide the 'auto' div entry by deleting it. For Croesus RT, I just add a 'sell' transaction at the delisted price and date. For Genting 5.125%, I added 'sell' transaction and a final 'Div' entry. I didn't adjust the div entry back then for Saizen REIT, so live and let live. Still a good platform for tracking div. Thanks for the hard work.
31 Oct 2017 18:08:29
- What about cases like RickmersMaritime?
They delisted but nothing is left to pay out to unitholders.
2 Nov 2017 02:12:23
- And Saizen Reit?
They bulk of the dividends are paid out early. Then after settling fees, they pay out the rest (a small amount) closer to delisting. This still causes the P&L to be really negative.
2 Nov 2017 02:14:08
- "What about cases like RickmersMaritime?
They delisted but nothing is left to pay out to unitholders." => You mean it is somewhat bankrupt and could not pay dividends nor buy back the share? Then I would say selling at price 0 is fine.
"And Saizen Reit?
They bulk of the dividends are paid out early. Then after settling fees, they pay out the rest (a small amount) closer to delisting. This still causes the P&L to be really negative." => This is more tricky. But if you really would prefer to shift the "gains" from dividends to P&L, one way is to add a sell transaction at price that you bought it at when it gave out huge dividends then add another buy transaction at price "that you bought it at - dividends given". Note that you would also have to override/remove the huge dividend manually.
2 Nov 2017 06:40:35
- "They delisted but nothing is left to pay out to unitholders." => You mean it is somewhat bankrupt and could not pay dividends nor buy back the share? Then I would say selling at price 0 is fine."
Haha yes. They could not pay unitholders anything so the selling price of 0 is fine I guess.
Actually, I'm curious why there is a need to remove the delisting dividends automatically?
We can manually remove that dividend and add in our sell transactions right?
By removing it, it sort of creates an error in the complete set of information. If it's a manual intended action, we will be aware of what we're doing.
Alternatively, is there any way to create a different category to capture such payouts? e.g. tag as delist and handle it differently...... may take quite a bit of rework for such infrequent activity though.
2 Nov 2017 18:18:38
- "We can manually remove that dividend and add in our sell transactions right?" => Yes, you are right. It is certainly possible to do so.
"Actually, I'm curious why there is a need to remove the delisting dividends automatically?" => The reason I am doing it is so that people do not have to do it manually :) And I assumed that it should be the default and recommended option.
"By removing it, it sort of creates an error in the complete set of information. If it's a manual intended action, we will be aware of what we're doing." => You got a point here. But since it is done. I am lazy to redo it :)
2 Nov 2017 19:59:04
- I see. So what criteria/factors are being used to determine whether it's the delisting dividend, which will be removed?
5 Nov 2017 21:06:52
- "So what criteria/factors are being used to determine whether it's the delisting dividend, which will be removed?" => I am using two main criteria. 1) The stock is delisted soon after the dividend is given out. 2) The dividend is ~100% of last traded price.
5 Nov 2017 21:55:59
- I have Saizen REIT and the delisting dividends are still there under "Dividends". Can I just let the final sell price remain at $0 in that case?
29 Nov 2017 02:05:45
- Saizen REIT Dividends: https://stocks.cafe/stock/dividend/T8JU/saizen+real+estate+inv+trust?type=xdetails&exchange=XSES
@tsueyer, when you say it is still there, which dividends are you referring to?
And yes, it is fine to let final sell price to be $0 for sure in any case.
29 Nov 2017 09:22:11
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