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Microcap & Penny Stocks : JAWS;A P/E of 2 with 150%/yr Erngs Growth!!
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To: Harold Finstad who wrote (1721)6/11/1998 12:42:00 AM
From: Warlock  Read Replies (2) of 4230
 
Harold: I understand your reservations, but there are a few things that should be kept in mind.
Shorters will not profit by the dividend. While stock price may very well drop 20 cents when dividend is paid, it will probably recover most of that very quickly. And the shorters will owe the shareholder the 20 cent dividend on the shares they've borrowed.
In regards to NASDAQ listing. . . it is very important to the company. That is exactly why they are declaring a dividend versus a stock buyback. To attain NASDAQ listing, they need proper liquidity. Would not be present if they decimated the float by buying chunks of it up. And currently TGSK is very cash rich. . .
As far as the CEO making a killing. . . that is really a non-issue. First of all, he doesn't hold 5 million shares. Second of all, a dividend won't really enrich him. . . all equals out in the long run.
Also, when you stated listed companies that declare dividends don't cause shorts to cover. . . may be true in most cases. But most listed companies don't issue a 13% cash dividend in one fell swoop. . . very few do that in a year.
Obviously, there are plusses and minuses to each side of the equation. But overall, a dividend is probably a very prudent thing to do.
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