GE to cancel dividend?

[clifp]

I guess my $11 puts on GE will be exercised I got a bit more than $1 for them so I guess I am underwater on GE again...

 

[ziggy29]

The question is what the market's reaction will be at that time. I'd say there's a good chance it will pop up on the news. But I don't want anything to do with anything financial these days. Too much darkness lurks in the back rooms there.

Agreed on the last comment. As for what the stock would do on a dividend cut, I think it depends on two things: (1) how deeply it was cut and (2) whether or not the market believed that was the last shoe to drop. They could cut the dividend 50% and if the market believed that was the end of it, GE would probably rally sharply.

But more likely, as with everything containing financials, the uncertainty of what toxic waste is in the black box will likely keep it depressed.

 

[Gardnr]

Agreed on the last comment. As for what the stock would do on a dividend cut, I think it depends on two things: (1) how deeply it was cut and (2) whether or not the market believed that was the last shoe to drop. They could cut the dividend 50% and if the market believed that was the end of it, GE would probably rally sharply.

But more likely, as with everything containing financials, the uncertainty of what toxic waste is in the black box will likely keep it depressed.

Yep I basically agree about the div cut reaction, but who knows. Look what happened to the NY Times on Friday. They slashed the div and the stock was up 16%! It doesn't mean that it'll stay up of course. And it's still only at $4.07.

The market is a mysterious thing sometimes.

 

[ziggy29]

It's being reported that GE is cutting the dividend to 10¢ per share starting in the third quarter. That's still a 4.5% yield at the current price. The question is, is there another shoe waiting to drop in a market that expects shoes to keep dropping forever?

 

[haha]

It's being reported that GE is cutting the dividend to 10¢ per share starting in the third quarter. That's still a 4.5% yield at the current price. The question is, is there another shoe waiting to drop in a market that expects shoes to keep dropping forever?

Feb. 27, 2009

General Electric is cutting its quarterly dividend to 10 cents a share from 31 cents a share, saving $9 billion a year, CNBC reported. The move comes amid a steep slide in the company's stock price. The company's financial services operations have been hit hard by losses and delinquencies during the credit crisis and economic downturn in the past 18 months.

http://online.wsj.com/home-page?mod=djemalertNEWS

The article link above is also mobile friendly. Mobile users, click the link to see this story now.

 

[Gpond]

Got to love the CNBC Pump Monkey Banshees. They are saying GE should be rewarded for "their courage" in cutting the dividend.

Jimmy Jones Cramer just said that he just bought GE for his trust and predicts from here it will be the best performing DOW stock for the rest of the year.

10 minutes of this happy talk back and forth and they never mentioned once they work for GE.

The reason that people have to state they own, work for, etc, etc, is because of Cramer pumping his company, The Street, when he worked over in 2000 and got fired for doing it. De ja vu.

 

[FinanceDude]

Got to love the CNBC Pump Monkey Banshees. They are saying GE should be rewarded for "their courage" in cutting the dividend.

Jimmy Jones Cramer just said that he just bought GE for his trust and predicts from here it will be the best performing DOW stock for the rest of the year.

10 minutes of this happy talk back and forth and they never mentioned once they work for GE.

The reason that people have to state they own, work for, etc, etc, is because of Cramer pumping his company, The Street, when he worked over in 2000 and got fired for doing it. De ja vu.

I don't listen to Cramer, he's just noise. But, when Immelt said "The dividend is safe, we have $40 billion in cash, the dividend is SAFE for 2009".......Well, I guess we just saw that the GE BOARD is now calling the shots, and Immelt should be packing up his cradboard box, because he's toast...........

 

[Gpond]

I don't listen to Cramer, he's just noise. But, when Immelt said "The dividend is safe, we have $40 billion in cash, the dividend is SAFE for 2009".......Well, I guess we just saw that the GE BOARD is now calling the shots, and Immelt should be packing up his cradboard box, because he's toast...........

YouTube - GE Reassures Investors Dividend is Safe

 

[FIRE'd@51]

This cut, although not totally unexpected, was bigger than I thought the worst case cut would be. BTW, I just calculated that this will knock about $0.09 off the annual dividend of the Vanguard S&P 500 index fund (VFINX). Last year VFINX paid a dividend of $2.50 per share, so this will be a significant cut for index fund holders, as well.

 

[clifp]

This cut, although not totally unexpected, was bigger than I thought the worst case cut would be. BTW, I just calculated that this will knock about $0.09 off the annual dividend of the Vanguard S&P 500 index fund (VFINX). Last year VFINX paid a dividend of $2.50 per share, so this will be a significant cut for index fund holders, as well.

I actually expected they would wait until the earliest possible time to cut the dividend and not make Immelt a liar, i.e the end of the year. Hopefully the .10 dividend is safe; famous last words.

My track record is starting to surpass Ziggy's as contrarian market indicator.. Unfortunately for you all I have no plans to buy or sale any securities in the immediate future, but when I do I'll let you know. Maybe I should start a clifp contrarian indicator newsletter. Each month I'll put out my stock selections and my readers will do the opposite.

 

[bssc]

I actually expected they would wait until the earliest possible time to cut the dividend and not make Immelt a liar, i.e the end of the year. Hopefully the .10 dividend is safe; famous last words.

My track record is starting to surpass Ziggy's as contrarian market indicator.. Unfortunately for you all I have no plans to buy or sale any securities in the immediate future, but when I do I'll let you know. Maybe I should start a clifp contrarian indicator newsletter. Each month I'll put out my stock selections and my readers will do the opposite.

Well, if you don't do anything, wouldn't this be a sign that we have hit market bottom and that we should rush out and buy things?

 

[Zathras]

Got to love the CNBC Pump Monkey Banshees. They are saying GE should be rewarded for "their courage" in cutting the dividend.

Jimmy Jones Cramer just said that he just bought GE for his trust and predicts from here it will be the best performing DOW stock for the rest of the year.

10 minutes of this happy talk back and forth and they never mentioned once they work for GE.

The reason that people have to state they own, work for, etc, etc, is because of Cramer pumping his company, The Street, when he worked over in 2000 and got fired for doing it. De ja vu.

While I don't particularily like CNBC, to be fair, I must say that anytime I hear them mention GE they are always very clear that GE is the owner of CNBC.
Now, I listen to Cramer even less than the rest of them, so he might be different.

 

[Maurice]

So when is GE a buy?

 

[clifp]

So when is GE a buy?

Right before home prices appreciate, the economy turns around, and all of their competitors go broke. My crystal ball is shattered into a 1,000 pieces, so you are on your own.

 

[Maurice]

By the way, isn't it surreal that they still have their AAA rating?

You'd think the rating agencies would have learned something in the past couple of years.

 

[ziggy29]

Wow -- under $7. The Immeltdown continues...

 

[al_bundy]

i predicted around $14 last october or november when it was trading close to $20, was i wrong

 

[al_bundy]

they've been talking about GE on Fast Money for the last few days. Karen Finerman who is into value investing on margin with hedging says stay away until there is more information about loan loss provisions