Written by: Xu Shihao
2020-04-06 15:35Date of last update: 2020-04-06 15:35
HSBC (0005) announced the suspension of dividend payment under the pressure of the Bank of England. There are small shareholders in Hong Kong who set up the "HSBC Shareholders Alliance". The goal is to collect 5% of the shares and convene a special general meeting. At present, about 2% have been collected.
The Alliance gave several press conferences today (6th). After the meeting, independent stock commenter David Webb left a message in the alliance ’s social group, saying that the use of stock dividends is not feasible. don't waste your money on legal action, you have no case)
David Webb recommends that small shareholders should not waste money on legal proceedings. (Profile picture)
David Webb said that HSBC's decision to stop paying dividends under the pressure of regulators is within the power of the board of directors. He believes that it is difficult to successfully file a case, so small shareholders should not waste money and file legal proceedings.
He reminded that the retained profits after no dividend will be distributed in the future as dividends or stock repurchases. The money has not disappeared, and it still belongs to shareholders. David Webb suggests that shareholders who rely on dividends to provide cash flow can choose to sell part of their shares to raise cash. For example, if one share is sold for every 24 shares, the cash held is roughly the same as the cancelled dividend.
As for the minority shareholders fighting for "substituting stocks for dividends", he disagreed, arguing that the distribution of additional shares would be equivalent to "dividing a pizza into more shares", which would have no effect on the share price, but would instead receive more "lots of shares." (Like dividing a pizza into smaller slices. You still own the same pizza. It is like a "bonus issue". It would also create odd lots.)
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