edusoft (EDUSF) Message Board

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Technology Stocks : edusoft (EDUSF)

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To: Arch who wrote (194)	3/27/1998 7:21:00 AM
From: Arch	Read Replies (1) of 272

The 0.524 irregular dividend was announced yesterday, and it lifted the stock by roughly the same amount. Investors (myself) may be puzzled as to why a growing company would pay a large dividend that is more than half of one year's earning. I would welcome others' comments. My own view is that this is a positive development. A few points: (1) I believe that the most compelling reason for the dividend is to satisfy Degem's need to get equity from EDUSF. Since a negotiation is not in sight, a large dividend would achieve the similar objective. If this is true, Degem will not sell its shares cheaply anytime soon. (2) It will give investors some insurance. We can invest the money to buy EDUSF or buy other companies. (3) It it news nonetheless and will get some attention. (4) It shows that EDUSF is fiscally conservative and will expand mindlessly. On the other hand, it is confident that it will remain profitable in the near future. These two features (fiscal conservatism and steady earnings) will make the stock less volatile. Downside? Its ambition for growth is limited too.

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