On November 22nd, biotech firm Maxygen (NASDAQ: MAXY) announced two special dividends. The first dividend involves the stock of its subsidiary Codexis (NASDAQ: CDXS) whereby for every share of MAXY stock, the shareholder will receive 0.19 shares of CDXS. The other dividend is a one time cash distribution of $1.00 per share.
I'm not entirely sure what the cost basis for the stock dividend will be, but from what I inferred from the press release (which you should read if you're considering this trade) is that the transaction date was December 3rd and at the close of that day, CDXS was trading at $10.00. Using that as a benchmark and given that the current price of MAXY stock is $6.85, your return on this investment would be [($10.00 x 0.19) + $1.00]/$6.85 = 42%. That's fantastic! Using these numbers, your breakeven point would be $6.85 – $2.90 = $3.95. The stock hasn't been that low in over two years. (The weekly chart shows strong support at $5.40.)
The ex-dividend date for both of these dividends is tomorrow, December 15th which means that the last day you can get into this trade is today. The pay date for the stock dividend is today (December 14th) and the pay date for the cash dividend is December 28th.
Here's to an early stocking stuffer!
Disclosure: Long MAXY
Disclosure: I am long MAXY.