Didn't Peter Lynch call it de-worsification when companies buy assets for the sake of buying assets? Or something like that.
I owned a relativily small co. that paid a dividend and a fellow poster made the same comment as to a co. that pays a divy because they don't have a better place to put it.
DWP, you have good writing skills. Thanx for the educative bits. You too lowman, I don't care what everbody else says, you guys are alright. LOL
Excellent piece! If you ever wish to write a disertation on stock market manipulation (especially in relation to MMs) or diversification, I'd be more than happy to place a link to the post, as I will, with your brief take on divys'.
Downwith-The asset acquisition scheme is even more of a red flag when the asset acquired consists of another non-operating shell, and the currency for the acquisition is shares.
And to spice it up, the company later announces a "spin off" of non-tradeable shares in the acquired company.
Excerpt from last Friday's PR. Gained .03 on the divy, lost .10 on the day. Gotta wonder 'bout the value of those divy's!
FTO31.94, -0.10, -0.3%) declared a regular quarterly cash dividend on the Company's common stock of $0.03 per share ($0.12 annualized). The dividend is payable January 17, 2007 to shareholders of record on December 29, 2006.
I suspect another gimmick is the issuing of warrants.
I've seen warrants issued that literally leave you scratching your head. Unfortunately, some get over excited about them. GFCI and RMEI are examples.
Another gimmick is announcing a spin-off only the spin-off doesn't happen or is delayed for months and months. GFCI is again an example.
Then there's the IDWD current fiasco of a promised buyout at 2.35 per share and it's currently trading around .75. I'm starting to wonder if this was a gimmick.
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