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Registered User
Joined: 9/23/2006
Posts: 6
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I worked for Indymac Bank for the last 6 years and when the stock was trading at around 45$ per share, the company announced it's plan to cut dividends. shortley after the stock went on a long decent until the FDIC took them in to receiveship. I then read an article about another trader who has tracked this very phenominum and noticed that 92% of the time when a company first anounces a dividend cut the stock starts to decline with in about 90 days.
Does anyone have any suggestions for tracking or sources that actually track companies that stop paying out on dividends?
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Registered User
Joined: 9/23/2006
Posts: 6
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better yet that announce that they will stop paying dividends?
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Registered User
Joined: 9/25/2007
Posts: 1,506
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cpoteet ....
A stock being sold as a result of reduction in dividend is almost an "automatic" function ...
Although most folks today look at stocks from a "growth" perspective ... there are many people and funds who still look at them from a "value" or "income producing" perspective ...
When you hear someone say that at this price the stock has a X% yield ... then if you change the price ... or the dividend ... then you change that yield ...
So ... why does a company reduce it's dividend ?
Well ... it could be to fund an expansion or acquisition ...
But ... it could also be that they've fallen upon hard times .... and if they have ... the stock price will surely suffer ...
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