I'm new to looking at this stock, but it's certainly intriguing. To the knowledgable people on this board, please explain to me how this company can sustain the dividend with a payout ratio of 170 %. Why do they continue to pay out. How can they continue to find the money to pay out?
much of their GAAP charges are non-cash. There was a multi-million dollar tax charge in the last year. They have stock compensation, capex amortization and such. They actually generate more cash then they pay out in bills and dividends.
Insiders are the biggest holders. David Hall the Founder owns over 1M shares (over 12%). A dividend is the most tax efficient way to pay himself
free cash flow has recently exceeded the quarterly dividend in the past few quarters, and the company has no debt either. Take a look at the CEO's remarks at last quarter's board meeting, where he annonced FCF exceeded the dividend by $1.8 million for the quarter. DB Tuner is a frequent contributor to this message board and can probably offer you a better answer than this, but this is the gist of it.