Is a $4 per share dividend a rational thing to ask for?
I'm long a few thousand shares and happy as the next person about recent developments for Transocean. This proposal by Icahn pushing for a $4 per share dividend has me puzzled. At the current price that is a 7% yield! Does RIG really have no other use for cash than a very large div? Hey, I'll take the money any way it comes, but this doesn't smell right to me right now. Any comments on this?
I have come to the conclusion that management isn't very shareholder friendly and was going to sell after the Macondo liabilities got settlled but now I've changed my mind. Icahn has done a far deeper financial analysis than anyone on this message board so I feel confident he's asking for something sustainable.
yeah, he's rich and like the other posters said (rich get richer on scale). they say it's easier to make your 2nd million than the 1st. He has money and makes money with it. Like my wife tells me to do and I say is insane (take 60K and buy 10 stocks vs. 1 stock). 7% yield is insane for RIG (or any firm). he's old, stupid with math and needs to retire and go fish somewhere before he starts to #$%$ and #$%$ in his pants (and then dies and he can't take his money with him. Then he'll be on even footing and most likely in trouble and hope he likes it hot).