I currently have a small holding of ACR and have been thinking about what kind of effect a one-off dividend (from the milestone payment) would have on the share price. First off, I'm not sure a dividend is the best way to go, probably better would be to use those cheap USD to buy something nice and synergistic for the company, but that depends on what is up for sale... Maybe even a share buy back would be the way to go?
Given that a dividend would be a possibility, however, I've been trying to work out what that would mean for the share price, and I'm just using 50 cents to be realistic and keep the math nice and even. I really have a hard time believing that the share price would stay low enough to be more than a 10% yield, no logic, just a gut feeling, so that would be 5 dollars a share. On the other hand, I've had a look a some other similar "one off" dividends, Biota being perhaps the best example I can think of. (not the most encouraging though!) In that case, the SP spiked to about a 3-4% yield at one point, that would put ACR in the 13-16 dollar a share range! I'm not really believing that would happen though.
And then there's the ex-dividend price, would we be looking at a profit-taking spike, or a buy-in to a new level? A spike might be a good way to sell and later re-buy, but I'd hate to make a mistake and miss out.
I'd be really interested to hear other, wiser opinions on this, if you care to speculate.
Cheers, BWGIA
ACR Price at posting:
$2.36 Sentiment: None Disclosure: Held
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