02/18/2019 – M.D.C. Holdings, Inc. (MDC)

  by Robert Brauer

Attention, those of you who own M.D.C. Holdings, Inc. (MDC):  MDC has announced a special 8% stock dividend. The dividend will take the form of a distribution of additional shares of MDC stock. Owners of MDC will receive 8 additional share of stock for every 100 shares owned on the date of record, which is February 14th. Concurrent with this, the strike prices for open call and put options for MDC have been adjusted downwards.

On February Trade Day if the position is still open, you will sell the extra shares you have received.

Lattco PRO/AutoPilot Clients: Please sell your extra shares of MDC first thing Tuesday morning. Once the shares are sold please contact us, and we will adjust MDC for you.

Lattco Users:
1) Take the net amount for the sale of the extra MDC shares, and divide it by the total number of shares that you currently own in MDC; this will give you the cost basis adjustment that you will need for MDC. For example, if you receive $1,000 in net proceeds, and you own 500 shares, you would take $1,000/500 for a cost basis adjustment of $2.

2) Take the cost basis adjustment figure, and subtract it from the price paid for each of your outstanding bundles of shares on the position. For example, if you had a bundle of shares that was purchased for $40 and a cost basis adjustment of $2, you would subtract $2 from $40 to arrive at a new price paid of $38.

3) After you have completed adjusting each bundle of shares, you will update your band rule worksheets to reflect the adjusted prices.

4) Update your Allocated Cash based off the new adjusted Initial Purchase Price. Following this, you may resume regular trading of the position.

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