Does anyone look at this special dividend as a positive. We were trading at 4.60 (6.6-2) prior to the announcement and now we are at about 4.50. To boot, we all have pay taxes on the dividend. How did this create value?
"Does anyone look at this special dividend as a positive. ... How did this create value?"
It didn't. Special dividends are nothing more than a transfer of control over a specific amount of money. As a shareholder, you already owned that two dollars per share but company management had control of it. Now you have control of it. That's the only difference. It's no different than moving money from one of your existing accounts to another. No value is created. It's a perfect example of the emotional side of investing. A special dividend is declared, so the stock shoots up as if it's free, found money. It isn't. The money was already there. The very act of declaring it's going to be given away doesn't make it more valuable, but countless shareholders like to believe it does. And then when the stock price adjusts on the ex-date, everyone is shocked! "How could giving away two dollars possibly make the company stock worth two dollars less? That was free money, created out of thin air! We was robbed!" And then they all claim it's manipulation by the Wall Street crooks, because to recognize that six minus two really does equal four is to admit they were ignorant of how dividends really work.