It's called a mean reversion. The market often works in cycles, as investors see things differently at different times.


Investor 1: "They are pulling their dividend. Times are bad. I'm out!" (sells)


10 days go by


Investor 2: "Wow, this stock looks cheap. I'm buying!"

Many investors invest based solely on financials and stock screeners. If one looks at a company reducing its dividend through solely a stock screener, it might look like a great value company, having a P/E of 8. For some - and for an algorithm - that's enough of a buy signal.

Only LevelFields provides  instant context so you can see the financials AND the event catalysts AND how the stock moves play out over time. That's how traders can profit on the upside and the downside over and over.


Other times, a company's willingness to reduce their dividend and announce that will be sufficient to survive whatever proverbial storm their dealing with makes investors feel confident management has the crisis under control. 


Most often though, stock prices will drop after a dividend is cut because it is a sign of financial weakness.




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