Ford Motor Company (F)

[farooq]

Here is the reason, Ford bought about about 1.8 Billions worth shares to reduce the shares given to labor against pension and health care benefit.
When it came to maturity of convertible bond they used those shares to give them in stead of cash.
This act in lay man term is company is short of cash or not confident to make money in future. So stock took a tumble. After word results of earnings were sub par because of new product expense and new CEO put all possible deductions in those quarters.
Its not a bad Idea to save money from taxes but every one in market is not so bright.
Most market big shot are less then average IQ people, follow the herd mentality type. So they follow the crowed and sell short and cover when stop loss is hit or margin liquidation.
Giving a huge dividend is big negative in market lingo, company is saying we have no place to invest your money so take it back.
These high yielding stocks are called widows stock which always stay in range, no growth. Almost all high flying companies pay no dividend you can see, even Breakshire do not pay a dividend
The current CEO is moron, if nothing else he should initiate a buy back program or invest in new areas and stock will start moving higher.
Last nail is, it is one of the liquid stock so when they sell basket to lower S&P it hit more to Ford, no new buyer and when reverse happen illiquid stocks are bought more which increase price faster for S&P buy program.
I was hoping this will be my year to get out of Ford for 22 to 25$ range but I think I will wait more. $30000.00 in dividend is not so bad for the quarter, although I lost 175,000.00 value while waiting for my price. I do go short against box but this time I was not; caught me by surprise. I did received some money from my covered calls premium, which I write according to market condition. We might see 14.80 to 15.30 by earning time my wild guess.
It is all my view and I was wrong many times and I can be in future so do your due diligence.
Good luck and happy trading.