Newspaper: Toronto Star
Reporter: Stephen Manning
Article Title: GE slashes dividend to conserve cash
For the first time since the great depression, GE, a major manufacturing and lending company, has decreased its stock dividend. Overall, it seemed like the correct decision, since before the cut as much as $13 billion per year were being paid solely in this, definitely not an ideal situation in these hard times. A lapse since the great depression broken now may signify great trouble, most likely not as much as in 1938, but possibly so. However, unemployment was at 30% in the thirties, while now it’s no higher than 7%
From an investor’s point of view, this incident has lowered the stock of the business. This is probably from a sales increase and demand decrease caused by the cut dividend, of course. A very unpredictable situation, stockholders have mixed opinions on GE’s move. However, judging by the situation in the great depression, GE raised its dividend after the recession finished, and the same will happen here. It may even be very temporary to conserve funds this year.