Stop Trading!: Cramer Responds to GE Dividend Announcement
Cramer “can’t do a snap analysis” about General Electric’s dividend announcement, he said during Friday’s Stop Trading!, not without parsing CEO Jeff Immelt’s previous statements about the payout’s dependability.
GE today authorized its regular quarterly dividend of 31 cents a share, but there seemed to be a caveat from Immelt. The CEO said GE would “continue to evaluate” that dividend for the second half of 2009 “in light of the growing uncertainty in the economy.” It might seem unusual for a company to make a big deal about paying its dividend, and add such a cautious tone about the payout’s near-term future, but Cramer was unwilling to jump to conclusions.
“We make a snap judgment on this,” he said, “we’re really not doing the public a good service.”
Elsewhere in the market, the stimulus plan’s extension of a $15,000 tax credit to new homes, rather than just existing houses, is good news for homebuilders like Toll Brothers. Short sellers, who’ve had a heavy interest in the group, might have to cover their positions, Cramer said.
The shorts have also bet heavily on bank failures, an investment that may pay off given Washington’s strict rescue plan for the financials. Cramer sees the chance for a bank bear raid despite the plan, undoing any gains the market seen Friday.
“I think that there’s the possibility that you restart all the bank hatred again,” he said.
Watch the video for Cramer's rant on Hovnanian and executive compensation.
Cramer’s charitable trust owns General Electric.
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