By Priya Ganapati
Wall Street pressure aside, most tech companies remain wary of paying dividends
August 5, 2005
Some investors may be hoping that Microsoft and other cash-heavy tech companies will share their profits through additional dividends, but analysts say most companies will direct their money to long-term growth, rather than short-term payouts.
“Investors invest in technology companies for growth and not profitability,” said Samuel Saunders, an analyst for Fulcrum Global Partners. “So companies like Google that have a strong growth potential in the future find much higher valuations than those which have matured.”
In fact, Google shares climbed from $95.96 last August to $317.80 on July 21. With that kind of appreciation, who needs dividends?
More at Red Herring online
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