This is a Bearish stampede, with a assumption that the taxes for the Capital gains will be increased and the stock value will go down. But, the same will happen in the reverse direction, immediately after the dust settles.
I would have liked to see a "Special Dividend", I think that might have caused a nice rally and got some shorts to re-think their position. I worry about this slowing market, but they are the best in the business, they will figure it out. The dividend is safe, we will see how earnings go this quarter, it might be in for a nice run if it posts good numbers!
The nice thing about "too much of shorting" is when the trend reverses and the covering begins. This is the perfect storm for this stock IMHO; the obvious difficulties of a printing company in a world of digital ink, and then the "premature release" on Google, dividend stocks all of a sudden being out of favor with tax uncertainty, all of which leads to tax loss selling. I would expect January to show a pretty good snap back from all of this and hopefully a short covering rally (of course some decent results would help).
You are absolutely right a "Special Dividend" will sky rocket the share price. I see lot of volumes after hours. Is it a possible "Special Dividend" announcement. Hmm wondering what will happen to the SHORTS.
S&P Recommendation BUY 4/5 Star Price
$9.09 (as of Dec 14, 2012)
12-Mo. Target Price : $17.00
Investment Style: Mid-Cap Value
I think RRD is at a very good price for entry. The company has got long term contracts and a very good cash flow. Any pop in the price is a drastic gain and while you wait for that, a 11.44% yield (today it was 12%) will not hurt the investments. Most of the investors are acting like Dodos (its not their fault) . Good luck.