GM $1 Share Dividend Costs $387m Per Year
That's the difference between the cost of maintaining GM's $1 per share annual dividend ($567m) and the company's so-called "free cash flow" (.33 cents a share or $189m). As Bloomberg reminds us, GM cut its dividend in half– from $2 to $1 per share– in February '06. At the time, talk of bankruptcy was in the air and on CNN ("And yet the evidence points, with increasing certitude, to bankruptcy.") GM was well into it current market share decline, having lost some $8.6b in NA the year previous. But hey, given GM's recent $1b per month cash burn, what's $387m between friends? That said, if you want proof that the ailing American automaker is still in denial/maintaining a brave face regarding its cash conflagration and North American market share tumble (down from 26 percent in '06 to around 20 percent now), look to see if CEO Rick Wagoner eliminates the dividend at his turnaround hoe-down later today. And then duck, lest a flying pig hit you in the head.