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GA Message Board

  • dudethatsnuts dudethatsnuts Sep 7, 2011 3:18 AM Flag

    Do Dividend Payouts Reduce Share Prices?

    I'll let a real source explain it to the board, so none of us have to rely on an anonymous poster who's making the rounds on this board and motivated only "to help people understand".

    This guy isn't #3 on Retirement and #4 on Income Investing Strategy on SeekingAlpha for nothing.

    A lot of the thinking by other posters on this board, and that thinking's resulting questions about the dividend effect on share price has been correct, but has also unfortunately gotten a lot of reasonable sounding answers that are anything but reasonable.

    @cwn600: Do you have any evidence this company is only a "scam" or is that only a hunch other than "I know a guy"?

    In a bid merely to gain credibility, why would the company flush their market cap down the toilet by a certain poster's repeatedly-claimed $3.00 amount, or his other toyed-with claim all the way down to sub-$1.00/share? Does the management of this company have a death wish for the company all juiced-up over a one-time dividend trick? That's a lot to take on faith and thus far this self-aggrandized options trader has provided no evidence whatsoever for his claims of fraud or cause for alarm.

    Meanwhile, the rest of the world thinks quite differently about this company. Doing some homework right here on Yahoo is a good start:
    12 analysts expect a 23.30% growth rate on average for next year, and growth of over 16% per year over the next five years. The lowest target share price any broker has on this company is $8.00/sh with a mean target of $9.66/sh and a median target of $10.00/sh. This company is flush with cash and ZERO DEBT. It has a forward P/E of 10.3 and a PEG of 0.82. The ROA is 11.11%. Company employs over 1,800 people. Its shares enjoy a lower Short Ratio than Shanda or Changyou.

    Dividends prove companies have cash. And if they're paid, that's a big stroke of trust to deliver to the shareholders. Historically, dividends make up 40% of the total payout investors make in equities. To suggest that dividends are merely a gimmick companies use to rip people off, or "autosell" their investments down if they don't automatically reinvest them is preposterous. To predict (prophesie more like) that a share price is going to drop the amount of a dividend requires a belief that a company is worth nothing more than their book value (of which cash (and by extension dividends) is a part of). Where I went to school, a share price is dictated by the expectation of future earnings (in a word, growth). And Giant Interactive provides a cheap, debt-free, high-growth vehicle that also happens to have a dividend to boot.

    Scared? Scared so badly that you feel compelled to "warn" people here over and over and over again? Might I suggest just shutting up and shorting it then, and stop letting your mouth betray your alleged trading brilliance.

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    • Sounds like no one here wants to interract with you. Maybe there are other forums you could try.

      "what's wrong with them?" You have the question backwards.

      I already said why I was here. Won't be around any longer.

    • I've repeatedly asked to do just that.

      If people already here don't want to discuss the company's future on this board without a formal invitation from me, what's wrong with them?

      And why don't you take your own suggestion? Does the company's future not interest you? Well, then why are you here?

    • I suggest you start a new thread called "invitation to discuss company fundamentals", or something like that, and then you will see if anyone wants to discuss the company's future with you.

    • Yes because when I make a thread like this one, daring to probe deeper matters over longer periods of time than your narrow-minded little ex-dividend date that you were stuck on helping others with, a matter that had little to nothing to do with the greater point of this discussion, you just had to show up and ramrod your little cherry down my throat in a series of personal attacks.

      Go hijack someone else's thread.

      If you have something (ANYTHING) to say about GA at this point, I'd sure like to know just what in the hell that is.

    • We know, we know. It appears that you're permanently confused.

      I was here to help people understand issues around payment of this large dividend, questions of the general type of "will I get the dividend if I bought on a certain date, or sold on a certain date, etcetera.....".

      Tangentially, there were some who thought the stock price would not adjust downward, and some who even thought it would go up, after the dividend was issued. So some of us tried to explain that matter. You became especially vitriolic when it was pointed out that the stock price would go down.

      No one ever engaged you in discussions of anything else. You kept asking why we didn't point out positives for the company. I cdn't care less about this company, and never ventured an opinion on it, bullish or bearsih. My only concern was clearing up dividend issues/confusion. Yet you keep whining about the p/e and your investment model that says high dividends are great.....Look, if no one ever responded to you on such matters, it means they don't care, and thus you were/are arguing with yourself. No one wants into your lonely world. Pack another gigantic bowl, Sean.

    • Or are you just here to talk about me?

    • "To predict (prophesie more like) that a share price is going to drop the amount of a dividend requires a belief that a company is worth nothing more than their book value ... Where I went to school, a share price is dictated by the expectation of future earnings"

      Brilliant, Alvin.

      • 3 Replies to cwn600
      • to under 6, I suppose the earnings still won't have an effect on share price, just like it's not a good thing that the dividend was paid. And thus, is something that must be "recovered" from.

      • now less than 6.

        But you haven't rubbed two words together either acknowledging this glaring omission of yours that I've already pointed out above, let alone seemed the slightest bit interested in price action anything past the ex-dividend date.

        Welcome to the world after Monday, btw. Do you have something to think about regarding this stock anymore or are you only here to offer further personal attacks?

      • robertweinstein Sep 12, 2011 12:25 PM Flag


        FWIW I think you responded to him a few more times (as in all but the first one) than your time is worth.

        Every dividend hunter is busy trying to figure out how to unload this loser trade as the watch the price sink further and further. smart ones got out early while they could and as the price falls and the clock ticks you can graph the intelligence level by how quickly people get out.

        I wonder how many will turn this dividend capture "trade" into an "investment" because they don't want to get out without at least breaking even (probably the biggest reason of all time in why people fail at the markets)


    • dude! Sorry to hear about your gigantic packed bowel.

      No wonder you can't get anything right.

    • "Heck, if this is gonna set you off again then it's just not worth it. The theory isn't THAT interesting. So that's why I want to clear this with you ahead of time.

      Is it OK? With you?"

      Unless you're cwn600, who I had a very simple question for, based precisely on his prior responses to a "scenario" that I merely asked the basis for that speculation, then I have no problem with you. You just showed up defending someone who A) has spent an inordinate amount of time on this particular stock B) is able to entertain conspiracies without hesitation, yet folds like a house of cards the moment he's questioned about them C) Can't handle any larger points being made, or any positive statements of fact made about this company to the exclusion of his alleged helpful neutrality and D) has provided a lot of long-winded and confusing answers to other people with very simple questions that could have been cleared up completely in one sentence.

      I think he just likes to hear himself speak. Now maybe he spends similar amounts of time discussing other stocks too, in which case he has way too much time on his hands.

      As for the interesting dirty bomb, if you're interested in it I suggest the first thing you do is to search for evidence, and at the very least, ask the perpetrator of the interesting story for evidence, as I did here. What's the harm in your doing that? If ignorant people attack you and call you names for doing so, maybe you'll find that mirror after all.

    • For having so much interest in this stock, you sure can't rub two words together regarding any of the larger points I've made on this thread.

      You live in a bubble where the ex-dividend means everything, you can't even handle simple questions breaching anything else, and you'll be damned if you can't constrain the discussion here to whatever ignorant narrow confines your scent-free rear end wants to.

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