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Does anyone know why particular companies establish DRIP's and other don't?

Also, would you ever expect young companies such as eBay and Priceline to establish DRIP's? Why or why not?

Thanks,
ShelbyBoy
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DRiP is an acronym for Dividend Reinvestment Plan. Young growth companies (or even ones that have been around for a while like Cisco and MCI Worldcom that don't pay a dividend would not offer a plan because there's nothing to reinvest. eBay and Priceline.com are both young growth companies and they are plowing all of their available resources back into the business to grow the business or pay off debt. They are not sharing any profits (if there are any yet for either of these companies!) with their shareholders in the form of dividends. Sorry, this isn't the most elegant explanation, but I hope it makes sense to you.

By the way, does anybody know of any companies who don't pay a dividend but do have a direct stock purchase plan? I think it would be a great way for a company to build a stable shareholder base and possibly minimize or somewhat reduce share price volatility.

Trevar
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<<By the way, does anybody know of any companies who don't pay a dividend but do have a direct
stock purchase plan? I think it would be a great way for a company to build a stable shareholder
base and possibly minimize or somewhat reduce share price volatility. >>

Trevar

Tricon (YUM) fits into this corner. When they split from Pepsi they maintained the DSP I think for the shareholders that were already DRiPping Pepsi. If you take a peek at their charts it is not so bad without a dividend.

Jenn
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By the way, does anybody know of any companies who don't pay a dividend but do have a direct stock purchase plan?

Airtouch Communications. Excellent company - worst of the high fee plans ($7.50 per purchase).

george
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Airtouch Communications. Excellent company - worst of the high fee plans ($7.50 per purchase).

Ouch! Like Sears (apparently also $7.50 per OCP). That's a double whammy -- high OCP fee and no dividend. Amazing. Interesting that you should mention Airtouch, though. This afternoon I was at Fedco (large membership department store-type discounter like Target). AT&T had a booth set up there with a big Airtouch sign. They were promoting their wireless plans. I asked the sales rep. if AT&T had bought out Airtouch (what do I know?). She said "no, they are just partnering on some wireless service." The rates are still high. I've decided that when it comes down to $9.95 a month for free weekend minutes and no roaming charges, I may break down and buy a cell phone. But it still bugs the heck out of me when someone's cell phone rings in the middle of the church service!!!

Trevar
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Trevar -

Actually, Airtouch is being bought by an English company (their name slips my mind at the moment). I had them as an outright purchase and sold after an excellent runup, as three companies vied to buy them out. Great future for the compaby, for obviously, forget about the DRiP.

george
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Oh yeah, now I remember. Isn't Vodaphone (or something like that) buying Airtouch?

Trevar
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<<Tricon (YUM) fits into this corner. When they split from Pepsi they maintained the DSP I think for
the shareholders that were already DRiPping Pepsi. If you take a peek at their charts it is not so
bad without a dividend. Jenn>>

Do you know what the fees are for Tricon? I sent for information but haven't received it yet. Am anxious to find out because I'm considering this stock for a graduation gift.

Slatebelt
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Here's a link to the fee info in the Netstock Direct database. Looks like a truly fee-free DSP, except for the sale fee. Low minimum OCP too. Might be a nice choice for a graduation gift....

http://www.netstockdirect.com/nsdasp/DetailLevel2.asp?QCompanyNo=19585

Trevar
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Thanks, Trevar, for your help. Yes, it does look like it might be a good choice. SLatebelt
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Yes, Vodaphone. Excellent prospects, for someone looking at an outright purchase.

george
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By the way, does anybody know of any companies who don't pay a dividend but do have a direct stock purchase plan? I think it would be a great way for a company to build a stable shareholder base and possibly minimize or somewhat reduce share price volatility.

Trevar

Becton Dickinson (BDX) has a true DSPP with a current dividend of $0.34 vs projected EPS of $1.60 for FY99. 79% of the net earnings are plowed back into the business. First Chicago Trust (1-800-955-4743) is the plan administrator. This is the lowest dividend payout combined with a low cost DSPP I have found so far.
-Jeff
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What about INTC?
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