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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (47161)3/23/2012 11:20:19 AM
From: Jurgis Bekepuris  Read Replies (2) of 78666
 
My feeling is that the people running these companies will eventually go to the next higher level of fraud -- give "investors" something to draw them in so as to prop up the stock price while the fraud continues. And that would be a cash dividend -- if the real company owners haven't siphoned the cash off the books yet.

So you think that a dividend can be used for fraud paranoia too? What is the scenario you imagine? The company gives shareholders 10-20% stock price dividend, then what? Announces secondary? The stock price does not really go up much and would drop on secondary anyway. What other fraud possibilities you see that the dividend would enable? Isn't it silly to give out huge stock pile of cash as dividend that could be siphoned to the fraudulent management instead? And if the company is a fraud, where did it get the cash from anyway?

Disclosure: I own large positions in GAME and PWRD. GAME has paid 20%+ special dividend. PWRD is going to pay 10%+ special dividend.
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