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Nokia Dividend Suspension Is A Positive

|Includes: Nokia Corporation (NOK)

Nokia's (NYSE:NOK) shares were down 8% yesterday mainly as a result of the company's move to suspend the dividend. Nokia's cash position is no secret so at this point in the game, as a shareholder, I would prefer that the company invest in promoting its new products rather than sending me a check from the company's cash flows. In turnaround situations, the initial suspension of dividends is almost always viewed as a negative, however as investors that require a dividend exit the stock and investors that would prefer to invest in a turnaround situation enter the stock, the losses tend to be recovered as long as the recovery continues to move in the right direction.

Disclosure: I am long NOK.