Palm Sells 25% Stake to Private Firm
Why pay a dividend now?
Ok, maybe someone out there knows more than me about this, why would a strugling tech company pay a $9/share dividend? Most tech companies never pay dividend, and then usually only if they have an amazing year or something... It seems to me this money would be better spent on R&D and advertising.
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Think of it this way. If there's 100 shares in Palm, Elevation needs to get 25 of them without just increasing the number of shares. So they have to reimburse the existing shareholders to essentially "give up" 25% of the shares they already hold. That's what the $9 per share dividend is for. Elevation is paying the existing shareholders for 25% of the stock each shareholder owns. Make sense? BTW, Palm is taking on more debt to finance the dividend payments...
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Yeah but they aren't buiying the stock from the individual shareholders... they are paying out a dividend; if I have 1 share of Palm and they pay a $9 dividend I still have 1 share of palm + $9.
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Man, if I had stock in a company that is taking on debt to pay a dividend I would wait for them to pay me the dividend then drop them like a rock... Call me old fasioned but it seems to me dividends should only be paid when the company actually has the earnings to pay them.
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Hey you have that option if you want to get a stock where they pay a dividend and if you want you could always leave them, but just remember you have to get those shares way before the ex dividend is paid and then wait a little bit in order to sell it. (Of course, many things can happen.)
I would rather have companies take on a little bit more debt and pay dividends or buy back shares and that is what many people are doing, especially since borrowing money is cheap these days and they obviously do not know what else to pay with their cash.
If you are struggling like Palm or other companies like them, paying a cash dividend will entice shareholders to stay.
I would rather have companies take on a little bit more debt and pay dividends or buy back shares and that is what many people are doing, especially since borrowing money is cheap these days and they obviously do not know what else to pay with their cash.
If you are struggling like Palm or other companies like them, paying a cash dividend will entice shareholders to stay.
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I can understand buying back shares, but for me, reducing corporate debt is more likely to keep me as a shareholder than borrowing money to give me. Also, I could understand if it were a LITTLE bit of debt, but they are talking about a lot of debt.
I still think when you are in the position Palm is in, there are a lot more important things you could use the money for, things that will actally help strengthen the brand.
I still think when you are in the position Palm is in, there are a lot more important things you could use the money for, things that will actally help strengthen the brand.
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Yea that is why there are many different investors out there who like what you like but prefer the way I do. Look at Icahn trying to make Motorola’s board to leverage more, borrow more, to buy back shares or pay a dividend. There comes a point where even if the company is doing well, sometimes the stock does not reflect that, and that is why companies try to buy back stock and/or pay dividends. Wal-Mart was the recent company who did not want to add to their expansion for the warehouses so they decided to buy billions of dollars worth of stock. You also have to remember, many of the company’s directors own their shares so I am sure they had a huge say in that. Every time there is a dividend or a share buyback, the insiders get a lot of that ...
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Right sometimes a company is doing well, but their stock doesn't reflect it. In that case it makes perfect sense to buy back shares or pay a dividend, but in this case I just don't think Palm is doing well enough for that. BOA, Verizon, GE, etc are all have very strong brands and strong service/goods portfolios, but I don't think Palm has that at this point. My thinking is this:
If they invest the money in R&D and brand repositioning they have a shot at developing something that really sets them apart; which if they market right will mean long term gains for the company and investors. Using the money to pay a dividend will increase the share price for a little while, and keep it from dropping as fast, but in the end they don't have anything...
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If they invest the money in R&D and brand repositioning they have a shot at developing something that really sets them apart; which if they market right will mean long term gains for the company and investors. Using the money to pay a dividend will increase the share price for a little while, and keep it from dropping as fast, but in the end they don't have anything...
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Yea it seems like you have been in the game a while as you understand the stock market vernacular and aspects. I commend you for that.
Well Palm needs to do anything they can to raise money or to try to do anything that will increase their market share domestically and broadly. Let us say that they do not issue that $900m dividend, what could happen instead? The stock price would continue to decline, perhaps stay at the same level, but many of the shareholders, the major ones, will start to have proxy fights with the board and obviously as we can see when that happens there comes many problems. I think this dividend is not a big deal because they can still have money or borrow it to help boost R&D and other spending. Many companies who ...
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Well Palm needs to do anything they can to raise money or to try to do anything that will increase their market share domestically and broadly. Let us say that they do not issue that $900m dividend, what could happen instead? The stock price would continue to decline, perhaps stay at the same level, but many of the shareholders, the major ones, will start to have proxy fights with the board and obviously as we can see when that happens there comes many problems. I think this dividend is not a big deal because they can still have money or borrow it to help boost R&D and other spending. Many companies who ...
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I can certainly see Palm going into Chapter 11, but I don't see Nokia, RIM or Motorola buying them. I do think its odd that the firm bought only 25%, I mean that is a nice chunk of a public company but man, just buy them out and get it over with LOL.
Hey maybe Pantech or one of the smaller players can snatch them up... while the big boys wouldn't benefit much a smaller company might be able to levreage some of Palm's technology. Oh man I just had a horrible thought... I am sure that Palm has some patents that some other PDA's infringe on... they could always sell out to one of those companies that just holds patents and sues people 😲
Hey maybe Pantech or one of the smaller players can snatch them up... while the big boys wouldn't benefit much a smaller company might be able to levreage some of Palm's technology. Oh man I just had a horrible thought... I am sure that Palm has some patents that some other PDA's infringe on... they could always sell out to one of those companies that just holds patents and sues people 😲
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