Special dividend was no more than pressure from the
BOD members representing one large institution in the stock and Birck of course saying yes so he can get a lot of cash out of the company before he either keels over or retires. IMO those were the only 2 factors driving this decision! This money would have been much better spent on buying back stock if they believed in their future. Now they will give away over $300M of their cash so don't expect the buy back to be too agressive since they operate in a very conservative fashion and won't want to burn through their cash too rapidly in light of the fact that they will give a big chunk away with the dividend.
After the sale, when the SP is 2.30 or so, the approved buyback can then purchase almost 95MM shares, almost 1/3 of the outstanding at that low price. If I were doing the buyback, that is when I'd kick in the purchases. Don't you think TLAB might be thinking the same thing? New guy at the helm is probably got the buys already lined up. No way will they want TLAB to sit there at that price for any extended period of time. The buyback program will drive it back into the 3's very quickly.
If TLAB management is smart about the buy back they will wait not only after the stock tanks $1 post dividend but until it trades under $2 which is what is going to happen after they report a #$%$ Q4. Global macroeconomic issues will not improve in the near term. If they start buying back stock early, all they will be doing is supporting the PPS and paying more for less stock. I have seen too many buy back where all the buy back did was support the PPS until the buy back ended and then the stock went down. TLAB should have learned their lesson after all the stock they bought in the $6s and $7s. All that did was temporarily support the PPS and when they stopped buying the stock went down 50% in a year or two. I hope they don't make the same mistake and buy back a single share over $2. For now I sit on the side lines and will re-evaluate AFTER the Q4 CC. BTW, the arbs seem to have the stock locked in this $3.36 to $3.38 price and it probably isn't going nowhwere until the $1 drop post dividend.
just bought 35,000 shares @ $3.37 on your advise.
I agree, don't see this going below $2 after the dividend payment.
What date do I get the $35,000 dollar special dividend? when will it appear in my account.
I am thinking this might not even go down at all and the $35,000 is free money.
Any chance of that?