Yeah, it was a thing.
@Boomer19 had the most to contribute on the inside technical workings specifically for the DTC. Do some searches to read the history: (for example, this one spanning from Aug 12-Sep 30, 2020, just use your choice of keywords)
Gist of it is, in the event,
certain brokers did not deliver their dividend shares to their beneficial owners in a timely fashion. At the time (Aug 31, 2020), they blamed the DTC saying "we haven't received the shares yet from the DTC".
Well N.S.S. you also didn't recieve a key to that penthouse suite in Monaco, because you didn't BUY or RENT it either.
It was only in the Pre-Market on Tue, Sep 01, 2020 when Tesla announced a $5B Cap raise and equity distribution that the SP squeeze was broken, and the SP fell by >30% in a few days (Tesla let the brokers off the hook with the Cap Raise by giving them a source of legitimate shares to buy, rather than naked short shares which DO NOT come with the dividend shares, you know, because they're COUNTERFEIT).
View attachment 835930
Your account was already active here at TMC during these events. I'm surprise (
not really) that you don't know this. MOst here ignored it, now can't quite remember it ( looking at you,
@henchman24 ) Yet over a dozen TMC members reported here that their dividends were
not delivered on time, while the SP fell by >30%
BEFORE they had a chance to sell their rightfully owned shares. That's a class-action lawsuit in my books.
During the 1st week of Sep 2020, TSLA fell from $538 before the Cap raise was announced to $382 just 3 days later on Fri, Sep 4, 2020. That's a 31% drop, and it represents a stolen selling (or Put buying) opportunity taken from Retail beneficial shareholders by corrupt brokers (those who sell naked short shares via the Madoff Exemption).
View attachment 835931
THIS WAS
FRAUD.
And a Coverup.
And Business-as-Usual on Wall St. Yet no Brokerages were investigated or charged.
#$EC doyourjob
Paging
@StealthP3D @Boomer19
oh no! i can’t go through this again.
i thought we were friends - please lodger!
ok i saw some other people questioning the language in prior posts. for those, a split and a split via stock dividend are the same. there’s no difference in the way the street handles it. (i’m talking about US market here - if you had tesla held in some weird account structure in a foreign land that wasn’t a direct participant of DTCC, well, i’m sorry and that’s unfortunate. but in that case you probably don’t get the same treatment as a US holder with a US based account - but that’s probably the rules and regs of differing country’s market structures fault, not elon’s, not your broker, not dtcc, and not the issuer’s (tesla’s) agent.
to the gme guy, i didn’t read the medium article on gme. i have no idea what’s going on with gme.
for the most part, if you hold/held your shares of gme or tesla or nvda, amzn, googl, goog, aapl, shop, or any other large split that has occurred in the last 2 years at a reputable us brokerage, you got your split shares prior to market open on ex date, so that when the exchanges start quoting at the split adjusted price, your position and equity are inline with the live market. this includes places like IBKR, Fidelity, TD, schwab etc
that’s not to say those brokers didn’t have temporary glitches like unrealized PnL being off, or other nuisances, but the important stuff was correct in most cases.
ex date - date split goes effective
record date = ex+1
allocation date - for splits in US market, usually ex+2
(the real record date, not the nonsense “holders of record date” that’s mentioned in the prospectus that’s before the effective date of the split). people always confuse that, and fail to acknowledge the next sentence about “due bill period” which is the period of time between “holders of record” and the actual real world electronic trading world record date. you start with the tally on record date and include all the transactions during the sue bill period. that’s what’s affected by the split. (or you can just tally what’s up on ex+1 like in modern electronic times).
this archaic jargon is written for times when people traded actual stock certificates and they had to get pony expressed around with due bills attached to them.
i guess that’s almost what the GME clowns want to do by direct registration to “stick it to the man”, (although that can be done electronically - but i trust a modern broker to handle my transactions and inquiries quickly and efficiently INFINITELY more than a transfer agent - anyone that tells you different hasn’t dealt with transfer agents )
….but i hope someday they do actually persevere and stick it to the man - they kid of already did with melvin. i just don’t think that’s the way to do it.
the real record date in a modern electronic market on a t+2 settlement cycle is effective date + 1 (or ex + 1).
the allocation of the shares resulting from a forward stock split by DTCC 95% of time to its participants is ex + 2.
this means this is the day that the issuer’s (the company’s) agent releases the shares to dtcc, and when dtcc makes book entry accounting to all its DIRECT participants.
in my case, IB gave me my tsla spit shares on monday aug 31, 2020 - great.
but IB didn’t get those shares from dtcc until wednesday 9/2 - why? because it takes until the close of biz on record date (9/1) for the DTCC and the issuer’s agent to account for who is owed what, and to agree on the final book entries which are made on allocation date - the next day.
not all corporate actions pay on ex+2, but i’m trying to stay on course
and i capped DIRECT above. many accounts at foreign brokers aren’t direct participants of dtcc for one reason or another. they use a custodian who is a participant of dtcc to clear their US stock trading business. some of these custodians suck. so those customers maybe get allocated later than the US folks…so in that sense not all are treated equal.
i watched the docs, i love the conspiracies, i want them all to burn…but the split handling is generally what i explained above. this, by the way, doesn’t mutually exclude the antics that go on with madoff exemptions and phantom menace- it’s not meant to cancel that. what i’m explaining is just how the plumbing works in a T+2 system
but SIFMA is heading for T+1 soon (remember it wasn’t so long ago we were at T+5) so maybe some of the inefficiency gets cleaned up further in near future. it surely has since the progression from t+5 to t+3 to t+2
god speed!
