No. of Recommendations: 5
The stock actually goes up immediately after the dividend is cut presumably because it was oversold and the uncertainty and fear has been reduced.

In my experience this usually doesn't happen. Usually the stock price continues to linger on its downward path.

Companies cut their dividends (at least U.S. companies) because they have to. They just can't afford to pay the full amount anymore without making a bad situation worse, whatever it might be. If the company manages to get its house in order and prospects pick up then usually so does the stock price, if not, not.

Don't assume a dividend cut is quickly followed by a rising stock price. It usually doesn't happen so neatly.

kelbon
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