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Lulupoopsalot (65.02)

This company just bet $288,000,000.00 on an Obama victory



September 21, 2012 – Comments (5) | RELATED TICKERS: SCMR

Daniel Smith is the CEO of Sycamore Networks.  He has approximately 1.65 million shares of his own company.  Recently SCMR announced the special dividend of $10/share payable in October of this year.  Notice this is right before a likely Obama victory and therefore the prospect of a raise on all dividend taxes.  In total the 28.8 million shares outstanding will total a $288 million payout.  This from a company with a market cap of approximately $455 million.  Now this might not be politically motivated and I could be all wrong.  However, if I'm right, I think many other CEO's need to examine the possibility of special dividends since this 15% rate might be at risk.  Daniel is not only looking out for himself but in turn looking out for his shareholders.

5 Comments – Post Your Own

#1) On September 21, 2012 at 10:29 PM, awallejr (56.95) wrote:

Oh I think there is some truth to your supposition since Insiders hold over 36% of the company.

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#2) On September 22, 2012 at 10:32 AM, Mary953 (83.45) wrote:

So does this information move the dividend from the category of "To good to be true" to the category of "enlightened self-interest?"

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#3) On September 23, 2012 at 11:21 AM, Valyooo (34.43) wrote:

How was dividend income too good to be true?

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#4) On September 23, 2012 at 7:46 PM, constructive (99.97) wrote:

You may be reading too much into this.

Based on their operating results, it seems fairly obvious (even to management!) that the company was incapable of doing anything useful with the cash. Thus, they paid a dividend.

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#5) On September 23, 2012 at 9:42 PM, awallejr (56.95) wrote:

Perhaps Mega, but we know what the tax rate will be this year and not what it will be next year.  That isn't to say that they are "betting" on an Obama win, but that they are making decisions based on known tax treatments this year as opposed to what will be next year.

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