Strictly Buy and Sell Set Ups Message Board

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Strategies & Market Trends : Strictly Buy and Sell Set Ups

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To: chowder who wrote (3072)	3/31/2005 9:42:53 PM
From: profile_14	Read Replies (1) of 13449

It will drop by that amount. The ex date is the one that counts. You can box yourself by selling a deep in the money call against your stock. In other words, hold the stock, sell the call, collect the divvy and cover the call for 12 bucks less and make 12 on the divvy and 12 on the call. Look at what happened to MSFT. It gave a 3 dollar divvy and the stock dropped initially 2.80 and climbed back for a loss of about 1.50 before going down 6 full points in no time. The stock will probably not drop exactly 12.50 because some will see it as a bargain and try to anticipate a bounce. That has been my experience. It works whether the dividend is 3 cents or 12 bucks. Also consider the financial strength (sorry for the bad word) of the company after giving out so much cash. Is cash flow positive? Do they have enough for CAPEX? Why not drip it out over several years with a higher yield on the stock? These are all questions one should ask and I have not even looked up ATPL. Any way, the market has priced this into the stock already. Consider also capital gains taxes on the stock versus dividend taxes at lower rates. Good luck.

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