In their lateast 10Q, dated Nov 16 2009, Aspen Exploration (ASPN) details the one-time dividend they are paying out:
On November 2, 2009, Aspen declared a cash dividend of $0.73 per share. The dividend will be paid to stockholders of record on November 16, 2009, with the dividend being paid on or about December 2, 2009.
So the stock should be trading ex-div now. Yet watch where it is trading today:
Once Aspen pays out the dividend, it will have very few assets and would be worth around $0.4 to $0.5 (depends on some assumptions) than to the current $0.89. It doesn't have a functioning business so there is little going concern value.
I would have ruled this out as irrational market behaviour (mistaken newbie purchases, forced selling, etc) but it doesn't appear to be. There is very heavy volume so someone is actually buying on purpose.
So what is happening here?
What is uncertain is whether Aspen is worth a lot more if it manages to buy assets with its remaining cash (roughly $0.5 depending on your assumptions.) Management, one of whom is a major shareholder, has indicated that they are contemplating other scenarios with the remaining cash, including buying other assets in differing, but somewhat related, industries. Instead of Aspen being worth around $3 million, will it be worth $6 million if it buys, say, some prospective land for gold mining?
Another thing I wonder is whether the company can renege on its dividend announcement. Does anyone know if a company can cancel an announced dividend? I suspect they can't but I'm just wondering what is going on here.
Regardless of what happens, cases like this are a good learning experience for me. Newbies like me are investing to learn as much as we are trying to make money. Yes, that sounds crazy but my goal isn't necessarily to seek profits (although I don't want to lose money.) If you are reading this blog, you should keep this in mind (e.g. if you were near retirement, I don't recommend that you follow any investment ideas from this blog.) Ideally, I would have preferred if I was doing this when I was in high school or early 20's, but oh well, can't roll back the clock :(
Tags: Aspen Exploration (OTC: ASPN)