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Comment by trylfthsk | Hacker News Reader

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trylfthsk

Question - Why would they remain so committed to a dividend if:

1. They're losing money

2. Things are not going to improve near-term

3. Debt is currently (more) expensive

4. They're in a hugely capital intensive business and are on a current spending spree for competitiveness reasons.

Other than some hand-wavy 'optics' rationales it seems like a bad idea, but I guess this is why I don't sit on the board of an F500.

edit: should also note that tax drag is another malus against the dividend concept, altogether (rightly or wrongly) telling me the story that "we really don't have anything better to do with the money".

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Probably to maintain the share price, a dividend is all they've got going for them right now. If that goes the share price will probably tank.

What's the actual problem with this? They're not issuing more stock to fund expansion are they?

Hostile takeover? If intel’s market cap drops enough someone might decide to buy them out

If I understand it correctly, Intel would lose their patent cross licensing with AMD upon a "a Change of Control", significantly reducing its value. However, there are exceptions to that that are redacted from the public license.

Hostile takeover isn’t a change of ownership. It’s the same company just taken private by someone like Bain and capital…. Likely then gutted for max profitability.

Change of Control and Change of Ownership are two different things if you take the hint.

They can't even maintain their dividend with their latest quarterly profits. Dividend yield is 4.85%, so they should approx. be paying out $0.34 each quarter while they just made only $0.10 per share.

>Why would they remain so committed to a dividend

Pat tried to not have dividend but it didn't end well with their shareholders.

I dont think it is much of an issue as long as the ship is steering in the right direction.

On the plus side, you can just avoid companies paying nonsensical dividends and focus on companies actually creating shareholder value with their money.

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