TTT - Free Money?

Owning TTT and spin-off KHDHF has seemed to be offering "free money" of late. I am trying to take advantage of it. In August, they offered a rights offering to buy new shares of TTT at $6.60, up to 25% of your current holdings (Terra Nova Announces Oversubscription and Closing of Rights Offering). On the last day of that offering, TTT was at $7.76. Hmm, let me see, do I want to buy shares of a stock at $6.60 when the market values at $7.76? Heck yes!

To sweeten the pot, TTT said you could offer to buy more than the 25% allotment and if everyone didn't exercise their rights you would get more. I went in for 50%... not sure why I didn't do more but I didn't think I'd get the 50%. But I did. I ended up getting 900 shares at the $6.60 price September 2nd. It is already up to $8.40. Sure feels like free money.

Then they announced a new offer the other day. They are giving a stock distribution of KHDHF (Terra Nova Announces Third Distribution of Shares of KHD Humboldt Wedag International AG) to shareholders of record September 23rd. The way this one works is you get 1 share of KHDHF for every four shares you own of TTT. Now KHDHF closed today at $7.00. So by my math that is essentially a $1.75 stock dividend. You would expect TTT to drop by $1.75 a share the day after the distribution, but I am not so sure. TTT did the same thing back in June (Distribution of Shares of KHD Humboldt Wedag International AG). Pretty much same rules. Look at the TTT price around July 1st when the stock distribution occurred:

Date	Open	High	Low	Close	Volume	Adj Close*
Jul 14, 2010	8.43	8.50	8.32	8.36	90,500	8.36
Jul 13, 2010	8.45	8.53	8.35	8.50	150,500	8.50
Jul 12, 2010	8.44	8.55	8.28	8.37	52,300	8.37
Jul 9, 2010	8.29	8.59	8.25	8.50	83,000	8.50
Jul 8, 2010	7.85	8.27	7.85	8.25	125,000	8.25
Jul 7, 2010	7.82	7.93	7.62	7.91	175,600	7.91
Jul 6, 2010	7.93	7.96	7.70	7.75	126,100	7.75
Jul 2, 2010	7.91	7.96	7.57	7.78	153,200	7.78
Jul 1, 2010	8.25	8.43	7.83	7.95	163,800	7.95
Jun 30, 2010	8.51	8.70	8.31	8.33	254,900	8.33
Jun 29, 2010	9.27	9.45	8.43	8.57	484,100	8.57
Jun 28, 2010	9.80	9.91	9.61	9.89	163,300	9.89
Jun 25, 2010	9.70	9.96	9.50	9.83	208,500	9.83
Jun 24, 2010	9.56	9.67	9.46	9.62	171,600	9.62
Jun 23, 2010	9.42	9.60	9.38	9.60	103,500	9.60
Jun 22, 2010	9.62	9.62	9.35	9.53	205,500	9.53
Jun 21, 2010	9.40	9.62	9.37	9.49	159,700	9.49
Jun 18, 2010	9.54	9.56	9.37	9.43	63,100	9.43

Hmmm, I guess it did drop on June 28th from $9.89 to $8.57. Maybe not so much free money there...