Originally Posted by
Buck Rogers
But it's Delta's money do with as they wish(within fiduciary guidelines)....they would make money...a lot of money....so as a stock holder I go YEAH....you can go BOO...again I get it
BTW...if given a chance to vote they would vote to give themselves ALL the profit....leaving none for us....yes...I do think if given the opportunity they would strangle the golden goose, just short of killing it, if they thought that would maximize their total return.....thus I find your question without merit....nobody turns down MORE good stuff
Deuces
I am not really getting your point. From what I learned from my Finance professors in college, the stock buyback/dividend aspect is a function of the book value of the company.
Both of you and Mesabah are correct in ways. Cutting a dividend usually is not a good thing for a share price. If the stock price is extremely high vs what the company is worth, it would have been better for the shareholders to issue a special dividend vs buying the stock back.
A very good case in point. I invested a very large part of my claim sale in 3 US Bank stocks (a commercial, custody and investment) when the European Contagion threat drove their share prices down after the banks were recapitalized after the 2008 financial collapse.
As the old saying goes, “‘Greed’, got us into this mess, and ‘Greed’ will get us out of it.” So, it was about a $100,000 position. It was time to put some capital to work at such an opportunity.
When their share prices have been at or below book value, after the federal stress tests, they have bought back stock in slugs of equity off the open market. My percentage of ownership has increased over time. It has been a great investment for my retirement. This is even when they have awarded dividends.
If a stock buy back doesn’t reduce outstanding share count, at a good value, a dividend would have been a better choice for allocation of capital.
YMMV