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You know that buying a stock makes you part owner of a company, theoretically with millions of other people. But, while ownership has its privileges (at minimum you get a neat stock certificate and an invitation to the annual meeting), being an owner doesn't necessarily pay. Sure, you make money if the stock goes up, but only if you sell, and you can, in theory, lose all the value of your investment if the stock tanks.
Enter the dividend. Here, you get money simply from holding the stock. Companies pay a yield, which is expressed in a percentage based on the stock's price. For example, if a stock trades at $10, and pays a 10% annual yield, your dividend payment would be a $1. (Usually, companies break out the payments quarterly, so, using our example, you¿d get, well, a quarter each quarter.)
Companies that pay dividends fall into a few categories. First, you've got your big, stable companies that generate enough cash that it makes sense to throw some back to shareholders. Next, there are businesses, like real estate investment trusts, that are in the business of sitting back and receiving cash, then distributing it to holders. And, then there are companies that need to dangle a high dividend yield like a carrot to ease investor fears. Cigarette-maker Altria has been doing this for years.
Simply because a company pays a dividend doesn't make it a good investment. After all, you may want to take a chance on a growth stock that can move higher in price than dividend payers are known to do. But, you can¿t beat the safety of knowing that, even if a stock doesn't move in a year, you¿re at least making something off your investment.
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Thursday, May 29, 2008
RedEnvelope, Inc. Announces Successful Conclusion of Auction in U.S. Bankruptcy Court Chapter 11 Case
Comtex
SAN FRANCISCO, CA, May 29, 2008 (MARKET WIRE via COMTEX) ----RedEnvelope, Inc. (PINKSHEETS: REDEQ) today announced that, following a U.S. Bankruptcy Court-supervised auction under Chapter 11 Section 363 of the U.S. Bankruptcy Code on Tuesday, May 27, 2008, Provide Commerce, Inc., the parent company of ProFlowers, Secret Spoon, Cherry Moon Farms and Shari's Berries, has agreed to acquire substantially all of the assets of RedEnvelope, Inc. (the "Company"). Other qualifying bidders were given an opportunity to submit higher and better offers for the Company's assets through a court-supervised bidding process. In accordance with the details of the auction, Provide Commerce is set to assume ownership of the purchased assets on June 23, 2008. The Company intends to seamlessly continue its business operations during this transition period.
"We were pleased with the successful conclusion of the bankruptcy auction on Tuesday. We look forward to working with Provide Commerce and ensuring that the transition in the coming weeks is smooth for employees, customers, vendors and partners. In addition, we are thrilled that the auction maximized the return for our existing creditors," said Phil Neri, the Company's Chief Financial Officer.
"We are thrilled to add Red Envelope under the Provide Commerce family of brands -- they have a great brand, solid customer base and an attractive line of merchandise," said Bill Strauss, Provide Commerce CEO. "By combining the assets of both companies, we believe we can strengthen all of our brands while providing our customers with even more exciting products to choose from."
Although there can be no guarantee that we will be successful in repaying all of the outstanding claims of our creditors, we believe that based on the expected outcome of the transaction there is a strong possibility that our unsecured creditors will receive substantially all of the amounts owed to them. We expect to begin distributions in the next few months and hope to complete those distributions by the end of 2008.
For information regarding the Company or the successful bankruptcy auction please contact the Company's Chief Restructuring Officer, A. Stone Douglass, at (415) 512-6122.
About RedEnvelope, Inc.
RedEnvelope, Inc. is a retailer dedicated to inspiring people to celebrate their relationships through giving. RedEnvelope offers an extensive collection of imaginative gifts through its webstore, www.RedEnvelope.com.
Contact: Brandon Hamm Email Contact 415-512-6112
SOURCE: RedEnvelope, Inc.
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