Only thing certain is the divi will be cut
The only question now is how large will the divi cut will be.
Do you think most of the analysts just picked 40% out of thin air? They crunched the numbers. Remember the reality management now faces:
1. Issuing stock is impossible in this market.
2. Selling 2 billion in assets (including their best asset) will further reduce free cash
3. They need a billion dollars to fund growth projects
4. The plan must address funding for the divi, growth projects, and a believable debt reduction timetable
5. Their investment grade credit rating is on the line.
Nothing short of 40% will satify the market or the credit agencies.
Friday's trading told the story. Day 4 after earning announced was a big drop in SP. This will continue until they announce a credible, verifiable and realistic funding plan.