Seagate is strangled by their incessant need to maintain the dividend. There cannot be any investing with this strategy.
Exactly! When the company is focused on the wrong thing it's no wonder we are lagging behind. This affects everything - especially innovation. People can only do so much with the resources they're provided with.
Other than cloud drives storing data from IT 4.0 devices, what products does Seagate have for IT 4.0? I'd think any on board storage for edge devices would be solid state, not HDD. So, why exactly is Seagate hyping itself as an IT 4.0 edge innovator when the product it sells is not on the edge, but in the back office inside a giant consolidated storage rack? I don't get it. Help me understand.
What about IT 4.0, LYVE and HAMR? Should I sell my 32 shares or collect .86 cents in dividends? I feel like I'm playing black jack with UNO cards. Bingo!
Agreed. The share price does not fund capital expansion. There is no capital funding to expand or purchase technology when they are committed to a dividend. Mosely is focused on nothing more than that stock price pimple on his nose while ignoring any 10 year plan.
High share price opens no doors. It inordinately benefits executives through their generous stock options, leaving the average employee with comparatively little. The dividend s—s up $600M+ annually, which could otherwise be used to fund projects to provide the company with a future beyond its declining prospects for HDDs. We're constantly fed stories about HAMR that never appear to come to fruition. And worst of all, as the revenues shrink and threaten profits and dividends, you lay a few more of us off, destroying a sense of security. Business excellence indeed!
High share price is good for shareholders, executives, employees and the company. What do you think high share price equals? It opens doors for all. The question we should be asking is what is the company doing with those open doors?
What do you mean? Seagate is floating a cool billion in unsecured bonds which got downgraded by Moodys. That'll pay for a lot of business excellence.
But dividends help keep the share price up, which benefits the execs cuz stock options.
Execs do not get dividends from unvested RSUs and most execs sell their Seagate stock when it vests, so the dividend isn't for them, its to keep the shareholder demand. Seagate makes HDDs, stop the wet dream of becoming the next cloud company. Don't ya know IT 4.0 is coming? EDGE EDGE EDGE Gnarly.
Your perspective is that it's a detriment, but I can guarantee that the executives see it as prudent management by returning value to the shareholders (as well as themselves). The importance of spending money on the dividend is an admission that the executives no longer see Seagate as a growth company. If they didn't they would put that money into projects to get into new markets. The management has demonstrated time and time again that they are inept at doing so. There have been several attempts at moving into new markets by groups inside the company (sensors, alternative memory technologies), but they were shot down by the BoD. They simply see spending the money necessary to make those work as too big of a risk, and a distraction from Seagate's core competence, which is HDD. So better get to work on making HAMR a profitable technology folks, because they're burning the bridges behind you.
Dividend pay is a big part of executive compensation with all the zero cost stock grants awarded at the top. So of course that’s the focus at the detriment of anything else. It’s as clear as can be.