Inteliquent Special Dividend Caution
Inteliquent (NASDAQ: IQNT) just announced a major setback from one of its largest customers. To "offset" the bad news the company simultaneously announced a one-time special dividend of $3 per share. Since the payout exceeds 25% of the share price there are different rules for when the payout can occur.
Can someone explain the following in regards to October 31st? Is that the payout date or the day after the payout date?:
"As per NASDAQ rules, when a dividend is declared in a per share amount that exceeds 25% of a company's stock price, the date on which that company's shares would begin to trade without the dividend, or ex-dividend, is the first business day following the payable date. The company understands from NASDAQ that, because the dividend is expected to exceed 25% of its share price, NASDAQ would apply this rule, and the company expects that the ex-dividend date as set by NASDAQ would be October 31, 2012, the first business day following the payable date for the dividend."
It it my understanding that the following means an investor would have to purchase shares before October 16th to qualify for the one-time special dividend. Right?
"The record date for the special one-time cash dividend is the close of business on October 16, 2012."
I imagine a TON of shares will be sold after the dividend is received, but is there any upside to buying into the dividend? I could see the drop in share price following the payout easily canceling the gains anyone would see from the payout. Your thoughts?