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Microcap & Penny Stocks : FONR...Patent on Cancer Detection....
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To: Hunter Trout who wrote (543)8/3/1997 11:33:00 PM
From: Marty   of 560
 
Re: Dividends ... Hunter, you say FONR is "only doing so as part of settelment ...." Are you saying a dividend is scheduled to be paid? That is news to me as is the news that they had a shareholder suit against them a while back.

If they are a real small company, as Taxi says, than $120+ mil is a bit more than they need for operations, research and acquisitions appropriate for a company their size.. For example, it would be unlikely that they have the infrastructure to handle a $120 million purchase. Dividends are definitely not a waste of corporate assets. They may well not be appropriate at this time for this company. But I would like to know why not.

They just received in a mountain of cash, probably more than they can use for expenses and expansions. If they have plans for the lawsuit proceeds they should let the shareholders know. IMO, the reason the stock price did not go up after the settlement is was the realization that there was not going to be a distribution.

BTW, cutting checks for dividends does not kill "bottom lines". Dividends are not expense items ... dividends are what companies are supposed to do with profits unless the managers have better uses for the cash that will eventually accrue to the benefit of the SHAREHOLDERS. Dividends reduce the cash balance but they do not affect net profits.

If FONR doesn't view shareholders as ultimately entitled to dividends (and in fact has shareholder relations problems, like lawsuits) they are doomed remain a $3 stock.
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