Crocodile Garments Ltd announced a bonus issue.
"To celebrate the 60th anniversary of Crocodile in the apparel business, the Board has recommended the Proposed Bonus Issue of Shares as a requital to the Shareholders for their ever-lasting valuable trust and support".
David Webb comments:
"What a load of nonsense. Bonus issues, like stock splits, do not generate shareholder value - they just incur administrative expenses. The company should resume paying dividends instead. It has NAV of $1.67 per share (31-Jan-2012) but trades at $0.49 - that's unrequited love!"
Unfortunately, in Malaysia the situation is not much different, too often the Board of Directors "rewards" their shareholders with useless bonus issues (that only cost money), while not unlocking the value in the company.
Don't you know cash is a part of the CEO/Director's flesh? Paying out dividends to the shareholders is akin to cutting off a piece of meat off their fat belly
ReplyDelete