special dividend 28c + cap return 10c, page-112

There are two recent example of dividend stripping Lionel - RHG and WPG Resources.

In the case of RHG the company had some fairly significant assets (that were in demand) and the share price fell by about the cash value of the dividend and has powered on ever since.

WPG was a different story. It was a fantastic opportunity for pension paying super funds as it was impossible to lose money. So millions of shares changed. The shares fell by a lot more than the cash value and, I believe, the price is being held down by super funds dumping stock at the moment.

In the case of Exco at close to 70 cents, a super fund looking at dividend stripping may see that it is a slightly risk proposition. The 12 cent benefit (franking) that they have over other investors is not a great deal if you don't understand how good it is. From talking to brokers around Sydney there were more super funds jumping on board when the price was around 63 cents.

I personally think the company is going to create more interest without the cash. If a person currently wants to invest in a quality small miner with good prospects they are only getting half value with Exco currently because they are buying cash. Investors don't like buying cash. In my view the dumping by some dividend stripping investors would be more than matched by buying into a quality stock.