Announce a dividend cut and drive the stock price down - then buy back your own company shares on the open market at the new depressed price. Eventually the stock price will rise and then the company makes a huge gain on the stock. Did Bernie Maddoff get released ?
I did some quick math so correct me if I'm wrong.
If they purchased 2B worth of shares at $31.50 it would be roughly 61M shares. Multiply this by the new dividend and you would have roughly 131M worth of revenue off of these dividends per year. Is this close?
Yes, the would essentially be 'paying' themselves the 6.9% dividend ($2.16 dividend n a basis of $31.50). So, if they have $2B laying around is would seem like a prudent way to spend it if you didn't think you could get a better return some other way.