4 ms·
Why didn't bp stock go down today? I'd think ending dividends would be a huge deal.
by tocomment 16y ago
Why didn't bp stock go down today? I'd think ending dividends would be a huge deal.
- akronim 16y agoSince the probability of this was high, it would already be factored into the current price. The announcement just confirmed it.
- d2viant 16y agoWhen a company pays out a dividend, it's stock price drops by an amount equal to that payment. Aside from the payments it will make for cleanup, it's not like BP is making any less money after this announcement, in fact it will now have an extra $7.9 billion that won't be distributed to shareholders. Those withheld dividend payments will accumulate into a large amount of cash on its books and that cash will get factored into the share price, so all things considered it should boost the price of the stock. The canceling of the dividend was out of political necessity, not financial.