Cablevision’s board authorized the company to move ahead with a massive $3 billion one-time dividend that would pay investors $10.25 per share in cash.
The move is remarkable, given that the company’s stock trades for around $25 per share. Talk of the dividend should help support Cablevision’s share price following the collapse of a plan by Chairman Chuck Dolan to take the company private. However, borrowing money and actually paying it out should ultimately reduce the price to around $15.
The dividend would pay the Dolan family that controls the company $600 million. Some investors are clamoring for the company to instead use its financial capacity to shrink the company’s equity base by repurchasing stock. But the primary beneficiaries would be arbitrageurs who bought Cablevision stock around $31 after the Dolans announced their deal and are now in tremendous financial pain since the deal collapsed.
The television industry's top news stories, analysis and blogs of the day.
Thank you for signing up to Next TV. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.