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Emerson Radio Pulls a Surprise

|Includes: Emerson Radio Corp (MSN)

The management of Emerson Radio (NYSEMKT:MSN) must have been tired of getting no respect from the market. With an impeccable balance sheet and nearly $200 million in sales, you'd think they'd be worth more than the $60 million market cap they had yesterday, wouldn't you?

So they found a way to get some attention. They declared a special dividend of $1.10 per share —nearly 50% of the share price!

That got some attention, all right; about two million shares traded today (vs. a recent average of ~10,000), driving the price up as high as $3.50 (momentarily). Yet now, only hours later, the stock is back down to $2.90. After the dividend, the net cost per share is only $1.80. How crazy is that?

Just as a footnote: Before the influx of cheaper, more modern Japanese products in the 1970's, Emerson was one of the leading radio/TV makers in the US, with a brand going back to 1912. "Where have you gone, Joe DiMaggio?"

Disclosure: Long MSN