Prudent Guy

Four Reasons to Own Dow Chemical

With respect to your reason #3, I don't think you really understand what is going on here.

The pricing does, indeed, have to do with the pending ROH acquisition. But it's that low precisely because Dow has virtually no maneuvering room for altering or getting out of the ROH acquisition, which looks like an absolute disaster at this point.

If, somehow, they were to get out of it, then I would not be surprised to see a 10%-15% single day pop in Dow's share price. But that's pretty unlikely - for ex, there isn't a real "buyer's remorse" clause in this deal, just a 750m penalty Dow would pay ROH if the deal failed regulatory approval (very unlikely).

As it is, they are left with having to use a lot more of that bridge loan than anyone expected, and when they have to refinance such a large amount in fairly short order, the credit market future is murky.

I admit the dividend is tempting, but things are a lot darker for this company than I think you understand. Maybe they'll pull it off (perhaps they could renegotiate the Kuwait deal so they get SOMETHING out of that), but it's not a cut-and-dried BUYBUYBUY at this level - there is still significant uncertainty/risk.