Phoenix New Media Ltd ADR (NYSE: FENG) is screaming for the top in the market this morning, and for good reason. The company announced a special cash dividend, exciting investors. Here’s what’s going on:
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FENG Stock Gains On Special Cash Dividend
In the press release, Phoenix New Media said that its Board of Directors have declared a special cash dividend. The special dividend amount is $0.1714 per ordinary share, which works out to $1.3712 per American depositary share. The total cash dividend will come to $100 million, which will be paid on December 22, 2020. The dividend payments will be made to shareholders of record at the close on December 4, 2020.
FENG also said that JPMorgan Chase Bank is expected to pay a cash distribution of $1.3512 per ADS to the company’s ADS holders of record at the close of business on the Record Date after receipt of cash dividends on the company’s ordinary shares and deduction of its fees and expenses. Keep in mind, JPMorgan Chase Bank is the Depositary of the ADS.
Finally, FENG said that its Board of Directors have also approved a special cash compensation to the Company’s option holders in a total amount of about $8.98 million.
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This Is Big News
Dividends are generally something that we look for in large, stable companies. Phoenix New Media stock trades with a market cap of just $113 million. As a small cap stock, a dividend is relatively unheard of, especially one that’s this big.
So, it’s not surprising to see that investors are flocking toward FENG, snapping up shares like they’re going out of style and sending the stock soaring in the premarket hours.
At the end of the day, dividends are an option, not a requirement, and when they’re paid, they represent a sign of financial stability, yet another thing not generally seen among penny stocks. So, the fact that FENG has the stability it needs to issue such an appealing dividend is exciting news for investors, leading to the dramatic gains in FENG stock that we’re seeing today.
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