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No Investor Day , no dividend

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  1. #51

    Join Date
    Mar 2010
    Posts
    5,556

    I did not even say dividends have been cancelled.Just the whole process has been delayed. As investor, of course I feel screwed
    by Corona if I have to wait longer than anticipated,
    Then RR suggest to create an own dividend.
    OK.
    Pls advise what to do once the annual dividend has finally arrived....


  2. #52

    Join Date
    May 2006
    Posts
    5,999
    Quote Originally Posted by RobRoy
    In this Corona virus situation a lot of European stocks have rallied on a cut dividend. Because investors feel the companies probability of default has significantly fallen given that they have a large cash buffer to get through this tough period.
    Really? Are you sure it had nothing to do with trillion dollar stimuli?

  3. #53

    Join Date
    Jun 2011
    Posts
    410
    Quote Originally Posted by Morrison
    I did not even say dividends have been cancelled.Just the whole process has been delayed. As investor, of course I feel screwed
    by Corona if I have to wait longer than anticipated,
    Then RR suggest to create an own dividend.
    OK.
    Pls advise what to do once the annual dividend has finally arrived....
    If it matters to you that you need the cash today. you create your own dividend by selling the same amount. When dividend arrives you can opt either for shares if the company has that option, or buy shares for the amount received in the dividend.

    The outcome of doing this will of course not be exactly the same as if the company would have paid out its dividend earlier. Because the stock price is driven by thousands of different factors and the market adjusts the price of your stock according to the latest available information on all these factors driving the stock price. You are in no means screwed, you will just be either better or worse off by creating your own dividend. But expected value of all of those outcomes is that you will be equally well of creating your own dividend as long as the delayed dividend has not deteriorated the company from running an optimal balance sheet structure. But since what is a optimal balance sheet structure is also re-evaluated by the market daily, one can not say a certain level of retained cash is optimal to another, that will vary over time. So the best guess given that we are in a stressed market environment for 99% of the listed companies, delaying cash payment, when companies are running low on cash will not be perceived negative by the market (just like my HSBC example). You might think is annoying and you feel screwed over, but you are not worse off..

  4. #54

    Join Date
    Jun 2011
    Posts
    410
    Quote Originally Posted by civil_servant
    Really? Are you sure it had nothing to do with trillion dollar stimuli?
    Of course stocks go up and down due to a lot of factors, but I have observed a lot of companies having a quick pop (adjusted for the general market movement) when they announced cancellation of their dividend.

  5. #55

    Join Date
    Mar 2010
    Posts
    5,556
    Quote Originally Posted by RobRoy
    If it matters to you that you need the cash today. you create your own dividend by selling the same amount. When dividend arrives you can opt either for shares if the company has that option, or buy shares for the amount received in the dividend.

    The outcome of doing this will of course not be exactly the same as if the company would have paid out its dividend earlier. Because the stock price is driven by thousands of different factors and the market adjusts the price of your stock according to the latest available information on all these factors driving the stock price. You are in no means screwed, you will just be either better or worse off by creating your own dividend. But expected value of all of those outcomes is that you will be equally well of creating your own dividend as long as the delayed dividend has not deteriorated the company from running an optimal balance sheet structure. But since what is a optimal balance sheet structure is also re-evaluated by the market daily, one can not say a certain level of retained cash is optimal to another, that will vary over time. So the best guess given that we are in a stressed market environment for 99% of the listed companies, delaying cash payment, when companies are running low on cash will not be perceived negative by the market (just like my HSBC example). You might think is annoying and you feel screwed over, but you are not worse off..
    OK, got it

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