Tesco Share Consolidation

Tesco will start trading on a consolidated based on Monday 15 February 2021. How will this be managed on Freetrade?

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Your holding will be converted - 15 ‘new shares’ replace 19 ‘old shares’.

Would you know how long after the ex dividend date you are required to hold the shares to receive the payout?

The payout is normally a couple months (maybe less) after the ex dividend date. Freetrade will pay you as soon as they’ve received the funds themselves.

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If you hold the shares before the ex dividend date you will receive the dividend payment. It doesn’t matter whether you own the share 1 day or a 100 days before the ex date - entitlement is yours if you own at the end of trading the day before the ex dividend date.

I’d caution against buying stocks purely because of an upcoming dividend. Typically this is either already priced in to the share price (e.g. you pay more for the share) / as soon as the ex dividend date passes the share falls in value by the amount of the distribution. In these scenarios you’d end up in the same position.

Obviously other market conditions can change the price for other reasons at the same time so it’s not always easy to clearly spot the effect of the share going ex-dividend on its price. Hope that helps!

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Yes, as long as you own it at the end of the required day you will receive the dividend, regardless of whether you sell it the next day or not. This is because of the point below.

I believe that it gets automatically discounted by the exchange or someone. So, if you receive a 50p dividend (on an ex-date), the price at opening the next day is automatically reduced by 50p.