Exit by billions in dividends
August 30, 2021 Leave a comment
The recent opportunity in the dividend stripping trade on being long Fortescue (FMG:ASX) was one of the more obvious in the Aussie market in quite a while.
As I wrote (cryptically) a couple weeks ago, that the stock has long-term downside risk and
once it trades ex-dividend the stock will likely see more weakness.
Records profits are terrific as are record dividend payments, but from the page of ‘knowing how the world operates’, I believe that for reasons of confidence, Dr Forrest can never be seen selling any of his FMG shares and so I think his strategy is to either pledge or gift them to other entities and drag as much of his net worth out via dividend distributions.
Over the past 3 years, ~ $7.5 billion has moved his general way courtesy of dividend payments. That may account for a third of his net worth.
If I could get another $7 billion out in the next 3 years, I’d be quite happy with that parachute move.
Don’t get me wrong, it’s brilliant.
August 30, 2021
by Rob Zdravevski
rob@karriasset.com.au
rob zdravevski's blog 