Cebu-based property developer Cebu Landmasters [CLI 3.41 2.57%], owned by the Soberano Family, will “lodge” the 1,909,451,997 stock dividend shares today with the Philippine Depository & Trust Corp.
This will make “tradeable” all of the stock that was distributed as part of CLI’s eye-catching 123% stock dividend. The stock dividend will end up having the same effect as a stock split, where the number of issued shares will rise but the relative holdings of each shareholder will remain unaffected by the change.
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The price of CLI automatically adjusted on the ex-date, when the per-share price dropped from a close of P7.27 on June 14th to a close of P4.00 on June 15th. Anyone who owned CLI on/before June 14th will receive the dividend that will make up for that price drop, and anyone who purchased on the ex-date or afterward will have purchased at the dividend-adjusted price, so nobody is harmed.
MB BOTTOM-LINE
The “123%” number was fun, but ultimately meaningless to stockholders as the value of their underlying holdings did not change as a result of the dividend. I’d love to know the behind-the-scenes thinking that went into declaring this stock dividend, but I’ve heard surprisingly little about it since the board approved the dividend in November and the shareholders approved it in February.
That’s about the worst thing that I have to say about CLI and its management team: that I, one person, don’t know exactly why it did this one thing that actually doesn’t have any impact on my holdings. Everything else that I’ve researched and heard about CLI has been glowing and pointing in the right direction.
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