No. of Recommendations: 27
"I think the discussion about dividends is not in alignment with Mr Vegas's reasoning. I don't think he is looking for steady cash flow. Commencing a dividend would likely boost the stock price. When Apple restarted their dividend the boost was far more than the tax consequences of the dividend. As Munger has said, look at the inverse question. What would happen to Apple stock price if it cut the dividend and held the money for future investment.
If you are an accumulator of BRK, it would not be to your benefit if a dividend was started. For a seller a dividend would help for two reasons. One, there would be more demand for stock. Secondly, there would be less supply as holders would not have to sell stock to get their dividend."
What Harold keeps ignoring is that starting a dividend just to influence the stock price goes against everything Buffett believes in and should send smart investors running for the exits.
Any company where the CEO and BoD does things purely to influence the price of the stock is not a company a person should want to invest in. If the BoD and CEO are willing to influence the price of the stock through a dividend, what other methods are they using to influence the price of the stock that you do not know about?
The CEO and BoD should be worried about running the company, not influencing the stock price.
