Why Safeway's Shares Blew Up and Eventually Popped
Dec 6th 2012 4:54PM
Updated Dec 6th 2012 4:58PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of grocer Safeway jumped as much as 11% today, after moving up its quarterly dividend.
So what: Management said it would pay its normal $0.175 per share dividend on December 31 instead of next year. This saves investors from higher dividend taxes that will take hold next year.
Now what: This is just another ridiculous reaction to a dividend, and the sell-off during the day shows that not all investors are crazy in chasing after dividends. Even near the end of trading, the stock is up $0.44, more than the entire dividend! This isn't a reason to buy the stock today, and I would actually wait for it to fall back to earth after this dividend craze is over if you've been looking at adding shares.
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The article Why Safeway's Shares Blew Up and Eventually Popped originally appeared on Fool.com.Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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