Over the last few months observing, I’ve realised why punters...

Over the last few months observing, I’ve realised why punters bought this company.

It wasn’t based on much, it was based on historical dividend payouts. I don’t think most punters actually looked into the consumer drivers/needs of this business too much..

Next set of results will likely be bad, and the challenge is they’ll have to preserve some cash potentially and reduce dividend payouts... but if they do that, that’s when the hammer drops as the high yielding dividend payouts were why people bought the stock... it was also potentially the reason why this stock had very little short sells against it...

So this puts them in a tricky spot. Keep paying dividends to keep holders happy in the short term, or reduce dividends to ensure longevity of business. I’m not sure which way it will go as Scali family are large holders so want longevity of business rather than short term stock performance.. but at the same time they need to play the game.