Yeah, well, I used Yahoo historical price numbers, and Yahoo isn't the last word on accuracy either, so I suppose we have to consider the possibility that both sets of numbers could be wrong!
"the closing price on the day prior to the ex-date was $29.15"
No, it wasn't. It closed at 30.36 the day before the ex-date. For the whole day it never dropped below 30.
"so all things being equal, the opening share price on the ex-date should have been $1.31 lower...., or $27.84"
No, 29.05. It actually opened at 29.14.
"and yet.... the closing price on the ex-date was $29.74"
You finally got one right.
"which is a full $1.90 higher"
No, actually, 29.74 minus 29.05 is 69 cents.
"so here's the question"
Based on wrong numbers, but go ahead.
"is it possible the SPECIAL dividend is not subtracted from the share price on the ex-date?"
No, it's not possible. The market simply bid up the price 69 cents on the ex-date. Prices fluctuate, that's all.
"Legal accounting manipulation is more appropriate to the explanation you have given."
No, it's not. Mutual funds are required to do it by law. There's no manipulation of anything.
"Regardless of how it is presented, the bottom line is the distribution is vapor money."
No, it's quite real. If it weren't, the fund price wouldn't be adjusted down on the ex-date. It's no different than an individual stock that pays a dividend. Stock prices too are adjusted down by the amount of the dividend on the ex-date.
You sound as though this is this your first rodeo.
"A mutual fund dropping over 13% overnight with no transparency or visibility into any behind the scene events was kind of disturbing."
It was completely transparent. Mutual funds pay out capital gains and when they do, the net asset value drops proportionally, and therefor so does the price. That's such common knowledge that I'm surprised that you're surprised.
"what is the sense of giving dividends if the fund price drops with it"
As I previously pointed out, the fund has no choice in the matter. It's a requirement for tax purposes. As for the price dropping, the price of a mutual fund is the net asset value. When a distribution is made, the net asset value is reduce by the amount of the distribution, so the price of the fund has to be lowered to match. It's really that simple.
"The hefty dividend is in my account today, with neither an explanation, nor footnote on how it is pro-rated."
It's not pro-rated. If you owned the fund for one day before the ex-date, you get not only the entire distribution, but the tax liability of the whole thing too. That's why it's usually not a good idea to buy a fund right before the capital gains distribution. This is very fundamental stuff and it's nothing new.
"I still can't figure out why they do it."
Really? It's what mutual funds have to do to. They have no choice in the matter.
"It serves no purpose other than perhaps as a means of capitalizing on any entitled fees on fund management."
No, it actually does serve a legitimate purpose, and it's not to increase management fees. Capital gains can't simply be piled up inside the fund without being taxed, and the only way to apply the tax fairly to all the fund holders is to distribute them and let the fund holders pay the tax at their own tax rates. That's not the fund's fault, it's the tax code.
You're not familiar with the standard repricing of a stock on the ex-date to reflect the fact that the dividend is no longer a part of the stock's net worth? You're not aware that the exchange reduces all outstanding orders without DNR restrictions by the exact amount of the dividend on the ex-date?
The most applicable example for this dividend is the last big dividend RCMT paid out. In 2012 when it went ex by $1, the closing price on the ex-date was $1.04 lower than the day before.
Standard stuff. Nothing unusual about it.
After all, when the stock goes ex this time, it will be worth two dollars less than it was the day before because the dividend is no longer available to buyers. So why would anyone NOT pay about two dollars less on the ex-date?
"you're basically getting a $2/share for free if you buy before end of month."
How can it be free when that $2 will be chopped off the stock price on Dec 31?
"Actually the $1 special dividend does not explain the price drop."
It does for Monday.
" 'The special dividend is payable January 7, 2015, to shareholders of record on December 17, 2014.' Hence we should expect to see the $1 price drop on Thursday."
No, a record date of the 17th makes the ex-date the 15th, as skiplarson pointed out. Only with mutual funds is the ex-date the day after the record date. With individual stocks, the ex-date (for normal dividends) is two days before the record date.
"If we only get one 35 cent dividend (distribution) in 20115, that will yield 4% for the year."
Yeah, but only the longest of long-tern shareholders are interested in what happens 18,100 years from now. The majority are probably more interested in what's going to happen next year.
"Because of the 3 day settlement, the record date is 3 days after the ex-dividend day."
No, the record date is two days after the ex-date, not three.
"If one month's good jobs numbers mean a strong economy then why is oil hitting new lows?"
Because the jobs numbers are for the U.S. only, while oil is a world commodity. Lots of countries in the world are not experiencing strong economies, and they're all part of the oil market.
$0.20s close? Is that the same as thirteen cents?