A humorous look at the companies that caught our eye, for better or worse, this week
Dividend 15 Split Corp. (DOG)
DFN – TSX
True or false? When a stock’s dividend yield reaches 20 per cent, it’s usually a great buying opportunity for income investors. Answer: false. Holders of Dividend 15 Split’s class A shares learned that lesson the hard way when the volatile, high-yielding stock recently suspended its dividend after the split corporation’s net asset value fell below the threshold required to maintain payouts. With the Class A shares plunging on the news and high interest rates putting sustained pressure on the underlying portfolio of dividend stocks, investors might want to read the fine print the next time they’re tempted by a massive yield.
Manchester United (DOG)
MANU – NYSE
Goooaaalll! Wait, no goooaaalll! Dashing the hopes of Manchester United investors who were eager to cash in on a sale of the soccer franchise, the club’s deeply unpopular American owners reportedly took it off the market after failing to receive their asking price of about US$7.5-billion. The unconfirmed reports sent the stock to its biggest loss on record and drew condemnation from Manchester United fans, who have long been angry about the Glazer family’s lack of investment in the club. “If they are intending to remain as owners they must be made aware of the negative reaction that news is going to create and the continued chaos and disruption that their ownership will continue to elicit,” the Manchester United Supporters Trust said in a statement.
Enbridge (DOG)
ENB – TSX
Business quiz! Shares of Enbridge fell after: a) protesters in Minnesota blew up a portion of the Line 3 replacement pipeline, saying it blocked a shortcut locals had been using for years to get to the nearest McDonald’s; b) the company disclosed that bandits working with an international car-theft ring had siphoned off millions of barrels of crude oil as part of a “buy a stolen vehicle, get free oil changes for life” promotion; c) Enbridge agreed to buy three gas utilities from Dominion Energy for US$9.4-billion and raised $4-billion with a stock sale at $44.70 a share – a 7-per-cent discount to the market price before the deal was announced. Answer: c.
Airbnb (STAR)
ABNB – Nasdaq
Listing your condo on Airbnb is one way to make money – if you don’t mind your guests inviting 20 of their friends over for a wild party the cops have to break up. Here’s an easier way: Invest in Airbnb’s stock. The shares surged after S&P Dow Jones Indices said it will add the short-term rental site to the S&P 500, effective with the index’s quarterly rebalancing on Sept. 18. With index funds that track the S&P 500 needing to add Airbnb to their holdings and potentially driving up demand for the shares, some investors are evidently trying to beat the rush.
Apple (DOG)
AAPL – Nasdaq
Care for a bruised Apple? With inflation-weary consumers choosing not to upgrade their devices as often, the iPhone maker’s revenue has fallen for three consecutive quarters year over year – the company’s longest sales slump since 2016. Now, China is dealing Apple another blow by reportedly banning the use of iPhones by employees in government-backed agencies and state companies. The crackdown – part of the government’s plan to wean itself from U.S. technology – could weaken Apple in a market that accounts for roughly one-fifth of its revenue. If next week’s launch of the iPhone 15 fails to generate any enthusiasm, the bruising could get even worse.
John Heinzl