MBIA Inc (MBI)

nitrene · Dec 8, 2023

Company declared an $8 dividend but it is only up $5. Seems like it should go up about $3 higher by ex-div date. Am I missing something?

Quanto · Dec 9, 2023

nitrene said:
Company declared an $8 dividend but it is only up $5. Seems like it should go up about $3 higher by ex-div date. Am I missing something?

Watch the ex-date: the notification says
"MBI announced a cash dividend of 8.00 with an ex-date of Dec. 15, 2023"

Yesterday's rise of $+6.04 (81.84%

) is different.

Normally when dividend gets paid out then the stock price will reduce by that same amount... ie. this will happen on Dec 15 (or the next trading day after that).

And here are the changes in the January Call options : (+2900% etc

)

nitrene · Dec 9, 2023

But why didn't the stock go up $8? It only went up $6. Seems like the market doesn't fully believe it or the company prospects after the dividend have gotten worse. So if MBI doesn't move it will be $2 less than Thursday's close.

newwurldmn · Dec 9, 2023

Tax leakage.

Quanto · Dec 9, 2023

nitrene said:
But why didn't the stock go up $8? It only went up $6. Seems like the market doesn't fully believe it or the company prospects after the dividend have gotten worse. So if MBI doesn't move it will be $2 less than Thursday's close.

You are expecting too much. Normally it has not to rise at all with such announcements! The occured rising of the stock is to attribute solely to market psychology, not to any finance math rules or so. Hmm... maybe part / part... I don't know the details of that company.
But what's sure is just the fact that it will fall by $8 on the ex-div date...
Yes, it could be a "trick" by the management at which at the end the investors lose $2.

Maybe some fixed-income / dividend-experts here can tell you more about this.

newwurldmn · Dec 9, 2023

nitrene said:
But why didn't the stock go up $8? It only went up $6. Seems like the market doesn't fully believe it or the company prospects after the dividend have gotten worse. So if MBI doesn't move it will be $2 less than Thursday's close.

you liked quanto’s drivel and not mine or even a follow up question?

good luck to you.

Overnight · Dec 10, 2023

Quanto said:
Normally when dividend gets paid out then the stock price will reduce by that same amount... ie. this will happen on Dec 15

The payment date is Dec 22nd.

Quanto · Dec 16, 2023

Overnight said:
The payment date is Dec 22nd.

Why did the announcement of the company, cf. above screenshot, say "ex-date Dec 15" ?
Also "Ex-dividend date" was Dec 15, ~~but now the same field shows "Dec 22" instead of the previous "Dec 15"~~ (I could swear it shortly was showing Dec 22, can't replicate it anymore :-)

):

Overnight · Dec 16, 2023

Quanto said:
Why did the announcement of the company, cf. above screenshot, say "ex-date Dec 15" ?
Also "Ex-dividend date" was Dec 15, ~~but now the same field shows "Dec 22" instead of the previous "Dec 15"~~ (I could swear it shortly was showing Dec 22, can't replicate it anymore ):

View attachment 329788

"MBIA said it will be making a special payout to shareholders of $8 on Dec. 22."

Seems perfectly normal for a company to pay it's shareholders one week after the ex-date.

https://www.marketwatch.com/story/mbia-declares-special-dividend-of-8-0fe0f3b2?mod=mw_quote_news