No. of Recommendations: 14
"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." - Umm
"I don't know what the word "pure" is doing in that sentence." - knightof3
I think it is pretty clear. If the dividend is being initiated just to influence the price of the stock. on the other hand, if the BoD and CEO initiate a dividend because the company has excess cash and no prospects of future investment, then they are doing so for reasons other than influencing the price of the stock.
"It's the job of the board of directors to be responsible to shareholders. If you think paying dividends increases your stock price, long-term, then pay the friggin dividend." - knightof3
Those are words that lead down a very dangerous path. If the BoD and CEO think fiddling with the reserves each quarter in order to smooth out earnings increases the stock price, long term, then they should do it? After all, it is being responsible to shareholders.......
Nope. That is the wrong path. CEO and BoD should be worried about capital allocation and running the company to make the most money (legally) long term, not the stock price. The market should worry about the stock price.
