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I’m holding stock in XYZ company and they are paying a dividend on April 3rd but the ex-dividend date is April 4th. In which of those two dates can I sell my stock and still receive the dividend?

Update

The dividend will be paid on April 3, 2023,to holders of ZIM ordinary shares as of March 24, 2023.

The ex-dividend date with respect to this dividend distribution will be April 4, 2023.

Shareholders who wish to receive the dividend must hold their ZIM shares until the ex-dividend date

Edit: Dividend info from the annual report

1 Answers1

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You will get the dividend if you hold the stock on the ex-div date, but it may not make a difference.

The value of a stock drops by the amount of the dividend, all else being equal, since it's "cash out the door" and reduces the value of the company, and hence it's stock. There's no "instant income" with dividends. You either sell for the pre-div price without the dividend or get the dividend and sell as the lower post-div price.

If the stock were selling for $100 and paid a $5 dividend, you could either sell the stock now for $100 or get the $5 dividend and sell for $95 (assuming no other moves due to market forces). There's not a way to get the higher pre-div price and get the dividend.

Taxes may make a difference depending on your holding period, tax bracket, and the classification of the dividend.


I was assuming that the ex-div date after the payment was bad information, but it's confirmed in their press release, and seems to be due to NYSE regulations:

Since the foregoing declared dividend amount per share constitutes more than 25% of the Company's ordinary share price on the declaration date (March 13, 2023), per the instructions of the NYSE, the ex-dividend date with respect to this dividend distribution will be April 4, 2023. Shareholders who wish to receive the dividend must hold their ZIM shares until the ex-dividend date.

I do not know the full reason for the late ex-div date; my guess is that they're trying to avoid any panic selling by shareholders seeing their stock drop by 25% suddenly before receiving their dividend.

So to answer your question, you must hold the stock until April 4th to get your dividend; if you sell before that, you will get the pre-div price and no dividend.

D Stanley
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