Method of creating new securities from equities: separately tradable registered independent dividend and equity securities ("STRIDES")

• US 20020161684A1
• Filed: 04/27/2001
• Published: 10/31/2002
• Est. Priority Date: 04/27/2001
• Status: Abandoned Application

• Current Assignee: Whitworth, Brian L.
• Original Assignee: Whitworth, Brian L.
• Inventors: Whitworth, Brian L.
• Application Number:
  US09/844,972
• Publication Number:
  US 20020161684A1
• Time in Patent Office: Days
• US Class Current: 705/36
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

Methods are disclosed for creating new types of securities, including equity dividend strips, equity dividend strip futures, equity dividend strip options, new index fund stocks, new mutual fund investments, and related securities are created in consideration of the cash dividends paid by companies issuing the original stock. Similar financial products are created for nondividend paying stock.

Additionally, the principles of the present invention can be employed to provide new corporate financing methods which make use of the aforementioned securities. An example of such a new method is the issuance of original common stock with a detachable dividend strip.

Purchase both and put the dividend strip into your retirement account.

Purchase both and donate the dividend strip to charity.

Give the dividend strip to a minor child, or a child in college.

The stock does not need to be paying dividends at the time the dividend strip is created. The dividend strip covers all future dividends, even if there are none now.

Investors can set dividend policy themselves, as long at the constraint is met: total dividends paid by company=total dividend received by security holders. Many security holders will have only stripped stock, or only stripped dividend.

Claims

1. A method of creating new securities from existing shares of common stock in one or more companies, the method comprising the step of:

creating two new securities from the original common stock, said securities comprising an equity dividend strip and a nondividend paying stock.

2. The method of claim 1 wherein:

the common stock is a single class of stock in a single company.

3. The method of claim 1 wherein:

the common stock is stock from companies comprising a preexisting index.

4. The method of claim 1 wherein:

the common stock is stock from two or more companies.

5. The method of claim 1 wherein:

the common stock is owned indirectly via a mutual fund.

6. The method of claim 1 wherein:

the common stock is owned indirectly via a unit investment trust.

7. The method of claim 1 wherein:

the common stock is owned indirectly via index shares.

8. The method of claim 1 wherein:

the new securities are traded on an exchange.

9. The method of claim 1 wherein:

the new securities are traded over the counter.

10. The method of claim 1 wherein:

the new securities are privately traded.

11. The method of claim 1 wherein:

the same investor holds said equity dividend strips in a different account from said nondividend paying stock.

12. The method of claim 12 wherein:

an investor holds said equity dividend strips in a retirement account and holds said nondividend paying stock outside of a retirement account.

13. The method of claim 12 wherein:

an investor contributes said equity dividend strips to a charity and retains said nondividend paying stock.

14. The method of claim 1 wherein:

said equity dividend strip is for dividends for a limited term.

16. The equity dividend strips of claim 15 wherein:

the amount paid to the security'"'"'s owner is calculated in consideration of actual dividends of one company.

17. The equity dividend strips of claim 15 wherein:

the amount paid to the security'"'"'s owner is calculated in consideration of actual dividends of two or more companies.

18. The equity dividend strips of claim 15 wherein:

the amount paid to the security'"'"'s owner is calculated in consideration of actual dividends of companies in a preexisting index.

19. The equity dividend strips of claim 15 wherein:

the amount paid to the security'"'"'s owner is calculated in consideration of actual dividends of companies in a specified group.

15. Equity dividend strips comprising:

a security which pays the security'"'"'s owner an amount calculated in consideration of actual dividends paid by one or more companies, said amount not being calculated in consideration of market value of underlying stock of said one or more companies.

20. Shares with a detachable dividend strip comprising:

a security which allows its owner to separate and transfer ownership of ordinary cash dividend payments.

21. The shares with a detachable dividend strip of claim 20 wherein:

said shares with a detachable dividend strip are issued directly by the company in whom the shares provides ownership.

22. The shares with a detachable dividend strip of claim 20 wherein:

said shares with a detachable dividend strip are not issued directly by the company in whom the shares provides ownership.

23. The shares with a detachable dividend strip of claim 20 wherein:

said shares with a detachable dividend strip are issued by a mutual fund.

24. The shares with a detachable dividend strip of claim 20 wherein:

said shares with a detachable dividend strip are issued by a unit investment trust.

26. The shares of claim 25 wherein:

said security is issued directly by the company in whom the shares provides ownership.

27. The shares of claim 25 wherein:

said security is not issued directly by the company in whom the shares provides ownership.

28. The shares of claim 25 wherein:

said security is issued by a mutual fund.

29. The shares of claim 25 wherein:

said security is issued by a unit investment trust.

25. Nondividend paying shares comprising:

a security which has the characteristics of common stock except that the security'"'"'s specification does not provide for allowing payment of ordinary cash dividends to the security'"'"'s owner.

30. Equity dividend strip futures or options comprising:

an exchange traded futures or options contract including terms which are determined in consideration of actual dividend payments on shares of common stock in one or more companies.

31. The equity dividend strip futures or options of claim 30 wherein:

said futures or options contract is based on terms determined in consideration of actual dividend payments of a single company'"'"'s stock.

32. The equity dividend strip futures or options of claim 30 wherein:

said futures or options contract is based on terms determined in consideration of actual dividend payments of stock of more than one company.

33. The equity dividend strip futures or options of claim 30 wherein:

said futures or options contract is based on terms determined in consideration of actual dividend payments of companies comprising a preexisting index.

34. Combining one or more detachable equity strips and one or more nondividend paying stocks to recreate one or more shares of a security originally issued with a detachable dividend strip.