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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc. -- Ignore unavailable to you. Want to Upgrade?

To: SiliconAlley who wrote (4413)	5/1/2020 12:43:06 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 4826

"Actually, no, because of something called ex-dividend . . ." Actually yes, if an investor is looking beyond the next quarter. The return on investment matters principally for the long term, and that equals the expected change in earnings per share, plus the dividend. If the dividend drops to zero, two things happen. First, the expected long term growth rate may remain constant. But the drop in the dividend could also signal a real reduction in demand for the firm's products. Second, the reduction of the dividend to zero not only cuts the expected return on investment but influences investor decisions on whether to continue holding a stock that can't even pay a dividend to cover inflation. Under stressful economic and political conditions that exist now, there are probably better investments than WDC. But at some lower price point, the shares might be a reasonably good buy. Having divested my own shares at more than double the current price, I'm not affected either way. Art