Reading Buffet’s early investments in Union Street Railway in the 1950s.
Company’s business is not going well, and its stock is cheap – $30–$35 per share despite roughly $60 per share in cash and bonds.
Simply by distributing dividends, the company can give $50 per share to shareholders.
While the company being cheap is important, the management’s willingness to give shareholder return is even more crucial.
A distant $50 is different from a near-term $50; not to mention other ways to destroy equity value.
Oh btw, Union Street Railway also needed local regulator’s approval to distribute it seems – so ultimately it’s also up to the change of thoughts from regulators.