- Leave it unchanged
- Reduce it
- Suspend it entirely
Sunday, February 22, 2009
Crowdsource: What will board do with dividend?
I'm now steeping myself in Gannett's dividend history, in preparation for the Tuesday start of the board of directors' make-or-break meeting on the payout's future. I'm posting from my iPhone, so gotta keep this short. What do you think directors will do with the dividend?
27 comments:
Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."
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This is not crowdsourcing. It's group speculation. There's a difference.
ReplyDeleteLogically it should be suspended. But Gannett is illogical, so they will most likely reduce the dividend.
ReplyDeleteI'm 48 y.o. & still employeed by a Gannett NJ paper.
Suspend.
ReplyDeleteI have to agree 10:21.
ReplyDeleteI always have to laugh when a reporter (tv or print) asks the man on the street his opinion or answer to some world crisis.
Who the hell cares. I want facts. I don't give a crap what Jim Bob Doe thinks.
And just in case you think I'm being overly negative--my verification word is "haterea" so I have to be...
They will reduce it significantly.
ReplyDelete25 cents says they just cut it, by about half.
ReplyDeleteOthers in the industry have cut, took the hit and survived, so they blazed the way for Gannett to have this out.
It will just blow me away if they leave it the same. And I don't think they're brave enough to suspend it.
Just my little group speculation for the day!
Send it an offshore account in the Cayman Islands
ReplyDeleteI have no idea what the dividend change would do, however, I find it interesting that out of 7 posts only one could follow your directions. Another factor for why Gannett is in trouble???
ReplyDeleteI'm 51.
In response to the commenter not knowing what cutting the dividend will do:
ReplyDeleteIf you bought one share of Gannett stock one year ago, the value of your investment has diminished 82 percent. But because Gannett offers a dividend payment regardless of stock value, your loss was cut to 23 percent. So if the stock was worth $1 a year ago (it wasn't but it's an even number), it's now worth 18 cents. But the company gave you a cash payment that gave back some of that money, making it worth 77 cents. It makes the company's stock more attractive for investors. They're an important source of cash for the company (especially now).
At least two other major media companies have cut their dividends by a significant amount, so presumably Gannett will follow suit. Beyond the financial reason for this, one can assume they have to start looking at the level of employee disgruntlement, if you will. They've already asked us for a week's pay, and will possibly ask for a 5 percent salary cut on top of it, meaning a 7 percent total reduction in our salaries.
If we're supposed to take that and keep producing good work, Gannett's going to have to demonstrate they're making concessions, as well.
As for 10:21's criticism of the idea of asking for group opinion: This isn't group speculation or "man on the street," because we're not some random jerk on the way to breakfast. We're supposedly (or supposed to be) more informed.
I'm 23 and came to Gannett from a business news organization.
Whoa!
ReplyDeleteYou're right.
I'm 2/22/2009 11:40 AM and I'm 50.
In fairness to the early commenters, I added the age request to the post after it was originally published.
ReplyDeleteReduce
ReplyDelete59 retired after 35 years
I think they cut it but don't suspend it. The board seems extremely attached to the dividend, and they don't want to cut it. Problem is, if they don't do something, their debt ratings are gonna be even worse than they are now. I don't think they can stomach the idea of suspending it completely, however. So I think they'll cut it. My "out-of-thin-air" guess would be that they cut it by two-thirds. The thing is, a dividend cut will likely hammer the stock even further, even though it's needed.
ReplyDelete36 and still an Gannettoid.
Suspend it entirely
ReplyDelete50, ex Gannett
I believe the dividend will be reduced. Gannett's Wall Street history has been dividends you can count on which was a big positive for institutional investors. Eliminating the dividend completely would be a total break with the past. Without dividends the only incentive to buy and hold the stock going forward would be price speculation.
ReplyDelete52 year old, former Gannett
Reduce
ReplyDelete41 years old, Gannett paper
to 12:24 -- I disagree that asking a bunch of random people on this blog for their opinions is "crowdsourcing" (it's not) and that the commenters here are more sophisticated than our readers (they're not). But you might be right on the outcome. Because you claim a business background, perhaps you could explain to the group what happens when the investors who have held onto their shares because the dividend cut their losses no longer have that benefit, and what effect that might have on stock price. This may be another case of "watch what you ask for".
ReplyDeleteMy guess: Board will seek to revert to historical dividend payout ratios, perhaps lower. Prediction: New quarterly dividend rate will be between 7 1/2 cents to 10 cents a share. Could come in as high as 15 cents a share or as low as 5 cents a share. Board will not eliminate the quarterly payout.
ReplyDeleteThere will be virtually no impact on the stock price. Why? A dividend cut has already been discounted into the price of the stock.
28, former Gannett worker.
I think they'll cut it by a third. I've been hearing that the pay cut will be as high as 10 percent and it will occur by telling full time (40hr week) employees to work four fewer hours a week.
ReplyDeleteGlad I got booted in December. It's going to start getting more costly to work for a newspaper.
I'm 31, happily -- and successfully -- running my own business now.
I say it'll be reduced.
ReplyDeleteI'm 36. Why does my age matter in giving an educated guess?
1. Cut dividend to a penny a share, quarterly.
ReplyDelete2. Announce more layoffs
3. Plan to close more newspapers
4. Announce furlough program extension to areas that won't be impacted by point #1.
Reduce slightly, announce layoffs, because Wall Street gets off on that sort of thing, and then announce a stock buy back program.
ReplyDelete32. Gannett for 7 years.
There Jim goes zagging his users again. What's up with that? You looking to sell that data to your advertisers?
ReplyDeleteI ask about age to see if there might be a pattern: I.E., would older retirees differ than younger current workers?
ReplyDeletecut it to a dime.will pay a dividend till the lose earnings disapear.48 years old and 23 years working.
ReplyDeleteSuspend Dividend
ReplyDeleteNo $$ for stock buy back
Retiree 64
While it would certainly be prudent to reduce the dividend given the astronomical yield at today's low stock price, many of the previous posters are being a bit short sighted in their calls to cut the dividend completely. Since Gannett has paid the dividend for so long and has increased it year over year for most of its history, many of the large institutional investors (who actually have a significant effect on the stock price) would be affected by a complete dividend cut. As an example, consider a mutual fund who seeks capital appreciation through equity income; eliminate the dividend and that fund now has to sell the stock regardless of whether they feel it to be undervalued at these prices simply because of their fiduciary obligation as printed in the prospectus.
ReplyDelete