The American Spectator

Fact: academic studies show that most corporate m&a transactions don’t work out for the buyer.

Fact: AT&T’s shareholders probably would have been much better off if the company had continued a regular, high payout rather than stumbling through the m&a underbrush in search of a telcom El Dorado. And this is one of Craig’s examples of a company that did it right!

Fact: Most CEO’s think they own the goshdurn company. They don’t have any trouble finding a way to get a current, cash-based return for themselves. They ought to extend that thinking to the shareholders who really do own it.

There is no scarier sight to than a CEO with a wad of cash in the bank and a yearning to reshape his industry.

p>Get that money to the shareholders! br> — Leland E. Hutchinson br> Chicago, IL /p>

Companies don’t pay dividends because they think you have better ideas than they do. It’s because they don’t have current projects that will meet their minimum requirement for internal rate of return. You don’t necessarily need a better idea yourself. You can do what you like with the money. Buy other stocks in companies that can use the capital. Buy more Microsoft stock if you like. They beauty of the process is that you decide. You might wind up funding the next great American success story.

Hammering dividend payouts with additional taxes curbs your freedom of action and results in the government wrongly influencing capital markets. Another result is companies end up holding mountains of unused cash which invites corporate raiding (another story altogether).

p>It’s ironic that you should choose Microsoft as an example since the government has been trying to curb their activities for the past five years. No one would be shocked to get the letter you imagined from Bill Gates ever since the government has been trying to keep them from making money. br> — Ed Callahan /p>