The DogeSPAC dividend is the distribution of the Company’s LLC interests to a class of its shareholders, as determined by the Company’s Board of Directors. Common shareholders are typically eligible as long as they own the stock of Kronos before and up to the close of business the day before the ex-dividend date.
These dividends are payments made by KRONOS, a publicly traded company as a type of reward to loyal shareholders, but regardless of how long you have held shares of KNOS, each shareholder is entitled to a pro-rata distribution based on the number of shares held on the record date and/or the close of business prior to the ex-dividend date. Currently, Kronos is awaiting FINRA’s setting of an Ex-dividend date and may postpone the payment date if necessary.
A dividend is a token reward paid to the shareholders for their investment in a company’s equity. While the significant portion of the profits is usually kept within the Company as retained earnings—which represent the money to be used for the Company’s ongoing and future business activities—the remainder can be allocated to the shareholders as a dividend.
The Board of directors can choose to issue dividends over various time frames and with different payout rates. Dividends can be paid at a scheduled frequency, such as monthly, quarterly, or annually. For example, Walmart Inc. (WMT) and Unilever (UL) make regular quarterly dividend payments, and Kronos endeavors to reach this level of success in the future so it can also pay cash dividends from significant profits, if/when obtained.
Start-ups and other high-growth companies, such as those in the technology or biotech sectors, often do not offer regular dividends. Because these companies may be in the early stages of development and may incur high costs (as well as losses) attributed to research and development, business expansion, and operational activities, they may not have sufficient funds to issue dividends. Even profit-making early- to mid-stage companies avoid making dividend payments if they are aiming for higher-than-average growth and expansion and want to invest their profits back into their business rather than paying dividends. Other examples include distributing shares of subsidiaries or paying additional shares of the same issuer to its shareholders.
Dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment.
Announcement date: When dividends are announced by company management that becomes the announcement date and must be approved by the Board of Directors before they can be paid.
Kronos’s Board of Directors approved and announced the decision for dividends on May 25, 2021 setting a record date of June 15, 2021.
Ex-dividend date: The date on which the dividend eligibility expires is called the ex-dividend date or simply the ex-date. For instance, if a stock has an ex-date of Monday, May 5, then shareholders who buy the stock on or after that day will NOT qualify to get the dividend as they are buying it on or after the dividend expiry date. Shareholders who own the stock one business day prior to the ex-date—that is, on Friday, May 2, or earlier on hold till May 2—will receive the dividend.
Record date: The record date is the cut-off date established by the Company in order to determine which shareholders are eligible to receive a dividend or distribution.
Payment date: The Company issues the payment of the dividend on the payment date, which is when the money or shares get sent or delivered to the record shareholders and then subsequently credited to investors’ accounts by the clearinghouses for those shareholders that own through stock brokerage firms.
Since dividends are irreversible, their payments typically lead to money going out of the Company’s books and accounts of the business forever. Therefore, dividend payments impact share price, which may arise on the announcement approximately by the amount of the dividend declared and then declined by a similar amount at the opening session of the ex-dividend date.
For example, a company that is trading at $60 per share declares a $2 dividend on the announcement date. As soon as the news becomes public, the share price could shoot up by around $2 and hit $62. Say the stock trades at $63 one business day prior to the ex-dividend date. On the ex-dividend date, it typically is adjusted by $2 and begins trading at $61 at the start of the trading session on the ex-dividend date because anyone buying on the ex-dividend date will not receive the dividend. Please keep in mind there is no guarantee that the price adjusts by lowering the share price by the dividend amount on the ex-dividend date.
Dividends can be expected by the shareholders as a reward for their trust in a company. The company management may aim to honor this sentiment by delivering a strong track record of dividend payments. Dividend payments reflect positively on a company and help maintain investors’ trust. Dividends are also preferred by shareholders because they are treated as tax-free income for shareholders in many countries. Conversely, capital gains realized through the sale of a share whose price has increased can sometimes be considered taxable income. Traders who look for short-term gains may also prefer getting dividend payments that may offer instant tax-free gains.
A high-value dividend declaration can indicate that the Company is doing well and has generated good profits. But it can also indicate that the Company does not have suitable projects to generate better returns in the future. Therefore, it is utilizing its cash to pay shareholders instead of reinvesting it into growth.
A reduction in dividend amount or a decision against making any dividend payment may not necessarily translate into bad news about a company. It may be possible that the Company’s management has better plans for investing the money, given its financials and operations. For example, a company’s management may choose to invest in a high-return project that has the potential to magnify returns for shareholders in the long run, as compared to the insignificant gains they might realize through dividend payments.
*Some of the information found above was compiled from several internet based sources including investopedia.com, OTCmarkets and others.