"How did their come up with the 10 cents dividend? Let?s imaging the dividend is only 3 cents instead of 10 cents."
Hey there Dr Pwu. I guess there are two ways they might have come up with this number: (1) earnings downgrade on Nov 23, and (2) the hit from Pfizer- this change was not known as SIP's SP was rising recently.
Putting those two things together, it is very possible that SIP will use some of the $900m to use for working capital to cover the shortfall of those two things, and also to pay off debt. If they use as much of the money from sale as they were going to, the new wholesaling business might not be a going concern. I am just guessing here. I guess the analysts do some number crunching based upon new circumstances.
Something else of interest today- Orbis has increased their shareholding from a prior 12.42% to now holding 15.48% of the company:
The new share price of 39.5c is a 6-month low, but not a 12-month low. I wonder is it in Orbis' interest to keep buying now as cheaply as possible to get value for new shares, or to do some frenzied buying to push the SP up, therefore getting better value for the old shares, of which there are many more.
I share your cynicism, fellow SIP holders, about analysts. I've seen them stuff around with share prices since I've been buying shares (only 5 months ago). Goldman Sachs put a "buy" rating (from "hold") on Nov 24, when the buy from Aspen was confirmed. One has to say the Pfizer desicion, though, makes Sigma hard to love.
Personally, I'm pleased to have a calculated target price of 10c special dividend (even if it's wrong). It lowers my expectations. I've been watching this target price move around, and made some posts on this thread in the past about what analysts said it would be. Now, we have less of a moving target to look out for. Of course, if we have more bad news, I'll probably be selling my shares to one of those share scalpers. :+/ Still to come for SIP- class action! :+<
Sepaking of claas action, does anyone know how these things get paid for if it is successful? From share coffers?
SIP Price at posting:
39.5¢ Sentiment: None Disclosure: Held
