Logically, dividend suspension or elimination should send a stock price down, but in reality the opposite might happen. Dividend suspension or elimination is a drastic step to conserve cash and is often taken to save a failing company from financial ruin. It usually comes after a period of falling earnings or mounting losses and a series of dividend cuts, which cause a major stock price decline. When a dividend is finally suspended or eliminated, speculators may decide that the worst is over and things can only get better. So they start buying the stock, pushing up the price.