Anyone a stock market expert?

[Steve_M]

I have a very small holding of shares in Aviva. There has been an announcement regarding “return of capital” and “consolidation of shares” link below.

 

A) It seems they’re giving us a “B share” value £1 for each share we own, and that will be immediately redeemed for cash

 

B) they’re consolidating the shares such that (approximately)  each 100 shares will become 75. 
 

 

Do either of these the total value of my share holding on completion? If so, why?

 

Link to announcement.

Many thanks.

 

 

 

[daveinlim]

Basically Aviva is flush with cash. The have sold 8 non core businesses

They have more cash than they need so are returning some to shareholders and then revaluing the shares after to reflect the new position. They are also set to pay out a ln increased dividend too. You won't need to do anything, should all happen automatically.

 

 

[Steve_M]

9 hours ago, daveinlim said:

Basically Aviva is flush with cash. The have sold 8 non core businesses

They have more cash than they need so are returning some to shareholders and then revaluing the shares after to reflect the new position. They are also set to pay out a ln increased dividend too. You won't need to do anything, should all happen automatically.

 

 

So the total value of my shares should, all other things being equal after all the dust has settled, be worth the same as they are now? As I said, I only hold a small number of shares which I’m holding on to because the dividend is a better return than money in the bank. 
 

 

[daveinlim]

Yeah your shares will likely go down a bit. This is normal for a share after a dividend has been paid out. It's slightly less attractive as you've to wait another term for the next share but it'll pop back up. You're basically just getting a bumper divided. 

Aviva is a good one for dividend historically. Obviously your tactic is more volatile than a deposit account but should be better on long run. 

[Steve_M]

44 minutes ago, daveinlim said:

Yeah your shares will likely go down a bit. This is normal for a share after a dividend has been paid out. It's slightly less attractive as you've to wait another term for the next share but it'll pop back up. You're basically just getting a bumper divided. 

Aviva is a good one for dividend historically. Obviously your tactic is more volatile than a deposit account but should be better on long run. 

To be honest, they were free shares which I can’t trade through my online account. I’ve had them since the company floated and can’t be arsed to go through the hassle to get rid. The dividend most years will pay for a couple of day’s fuel  when touring. I may flog them if I get desperate (ie. we run out of funds to complete the house renovation).

[daveinlim]

No point dumping them then if they are paying for something.