RIG gained 3 billion cash in 2 yrs. RIG lost 4 bill in earnings in 2 years. Where did the cash come from ?
Did that cash come from raising debt ?
With only 5 billion in cash now, wont RIG have to borrow money, to pay icahns 4 dollar dividend ?
Isnt that incredibly stupid ?
isnt that what private equity groups usually do to companies ? They go and borrow money, to fund payouts (not borrowing the money for the benefit of the company), then when the company can't afford to pay the new debt off, it goes sometimes goes bankrupt. There is a wall street term for this, that eludes me right now.
If memory serves, when icahn went after mot (mot mobility ?), there was some kind of payout. And there was a date you had to own the shares to, in order to receive it. And out of nowhere, after icahn got his payment, he was allowed to sell his shares, months before everyone else.
So go ahead, pay a 4 dollar dividend. But you better make dam sure he has to own it until the ex dividend date, and not give him an early out. why should he get special treatment.