Author Topic: SGY - Surge Energy  (Read 5083 times)

influx

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Re: SGY - Surge Energy
« Reply #10 on: April 27, 2016, 04:40:23 AM »
Does any have problem with the dividend as a form of capital allocation? I wonder why do they insist on this
I mean I asked them few times and they just say it is as it is and we constantly review it

I think they can by debentures, equities or even assets that long-term can be a really great value for all shareholders

Is it just so they have institutional support with those that depend on the dividend? Like PWT - they tried to retain it for some time until they finally couldn't. I am not saying SGY cant, but I am saying that they can have better capital allocation and more tax efficiency. Look BRK and others

What do you think?

Well the textbook corporate finance answer on why LBOs are successful is higher leverage forces the company to spend and invest with more discipline/scrutiny. Maybe you can draw a corollary from that when they have less cash on hand. But I certainly think its dumb.

Institutional ownership could certainly be a factor -- this is the case for CVX, XOM who are borrowing billions to fund their dividend -- but I think you should look at the board/officer incentives as well.

I forgot where I read this (but I can certainty look it up later if you are interested), but an academic was presenting a case on the textbook reasons for issuing a dividend. One of his students went above and beyond and called up one of the old board members and basically was told -- "oh the CEO needed money." He stopped presenting the case after that.

If "CEO has a $1 salary (all share based awards) and owns 3.1 million shares, " the dividend is nice paycheck.

true but dumb
unless he does drip or he re-allocated that dividend to something else SGY is supposed to do


influx

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Re: SGY - Surge Energy
« Reply #11 on: March 15, 2019, 09:45:52 PM »
Hey Folks.

Anyone following and invested in this nowadays? What are your thoughts?