RE:RE:RE:Dead stockRakaposhi wrote: There is zero incentive to buy this stock now. The scr wed investors twice in short order. No dividend left so what's the point? They may never pay a dividend again. I'll hold on to this for later this year and maximize the loss position closer to December.
Well... a dividend is only a small factor behind a company's valuation. Many stocks don't pay dividend (or a very small one) and have good valuations.
Despite the dividend cut, I still think chances are the stock will be worth $7+ once the economy restarts, with risks of a lower stock value should the economy stop again in the fall.
They have short term liquidity issues in funding new business as the lenders probably don't want to give covenant leniency on credit draws for new business. On the other hand, giving up new business is probably worse for Chesswood long term then cutting the dividend.
Due to all the uncertainty, it is hard to fix a long term value on the stock right now, which means the discount will stay large until they can show things will improve.
If the economy improves, there are fairly good chances for the stock to recover to $9+ with a good dividend within a year or so.