PIM Share Price Manipulation

Discussion in 'Stocks' started by lukematt, Nov 13, 2008.

  1. lukematt

    lukematt

    If you would like to see some dirty share price manipulation, look no further than Putnam Master Intermediate Income Trust (symbol: PIM).

    On days when PIM must pay its monthly distribution, the share price on the market jumps up hugely. The result—shareholders who have elected dividend reinvestment get screwed. Their monthly distribution buys a significantly lower number of shares at the higher price.

    Then, after the distribution has been paid, PIM falls down to a much lower share price on the same day.

    Examples:

    September 30, 2008 close $5.39
    October 1, 2008 open $5.89 (dividend reinvestment price)
    October 1, 2008 close $5.10

    October 31, 2008 close $4.90
    November 3, 2008 open $5.40 (dividend reinvestment price)
    November 3, 2008 close $4.81