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Crocs, Inc. Message Board

  • peristentone peristentone Jan 25, 2013 4:14 AM Flag

    Why No Dividend or BuyBack?

    CROX has tremendous free cash flow, yet they do nothing with it. They just keep adding to their cash balance, which harms their return on equity. Why don't they send out some of that FCF as a dividend or do stock buybacks?

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    • Apparently, most of that cash was generated overseas, and if they repatriate it to do a stock buyback then they will have to pay taxes on it (according to the CEO) they are figuring out a way to use it overseas....perhaps more retail locations...?!??

      Sentiment: Strong Buy

      • 1 Reply to only_de_troof
      • Are there any tax accountants here who could answer a question on this? What if a US corporation opens a European or Asian subsidiary that trades on its own symbol on a foreign exchange? If that subsidiary issues a large dividend to its shareholders, that dividend will be subject (for a US holder) to a foreign tax, and to a US dividend tax. But what about the portion of that dividend that goes upstream to the parent corporation? As long as the parent US based corporation owns more than 80% of the foreign subsidiary, will that divided be subjected to a repatriation tax?

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