Vet67to82's Blog : Special Dividends

Grinning, per my previous post on PDL BioPharma (PDLI) $6.18 +$0.19 +3.17% 12:47 PM ET

PDL BioPharma Announces Second Quarter 2010 Financial Results

http://phx.corporate-ir.net/preview/phoenix.zhtml?c=100463&p=irol-newsArticle&ID=1453250&highlight=

Highlights from the report:

( 1) Buying back dilutive debt: To reduce the dilution from our convertible notes, during the three months ended June 30, 2010, the Company repurchased at market prices an aggregate $84.2 million face value of the Company's 2023 Notes an average premium of 19% to face value for total consideration of $100.4 million in cash plus accrued interest. This transaction resulted in a charge to non-operating expense of $16.3 million or $14.7 million net of tax. The effect of these transactions was to reduce net income per diluted share from $0.38 to $0.30 for the three months ended June 30, 2010.

( 2) 2010 Dividends PDL previously announced that it would pay two special dividends of $0.50 per share each, to its stockholders in 2010. The first special dividend, totaling $59.9 million, was paid on April 1, 2010 to all stockholders of record on March 15, 2010. The second special dividend will be paid on October 1, 2010 to all stockholders of record on September 15, 2010. PDL does not pay regular dividends.

( 3) Cash on hand: Net cash provided by operating activities for the second quarter of 2010 was $123.6 million, compared with $103.4 million for the second quarter of 2009. At June 30, 2010, PDL had cash, cash equivalents and short-term investments of $223.7 million compared with $303.2 million at December 31, 2009, a decrease which can be primarily attributed to the repurchase of convertible notes, payment of the April dividend, pay down of the non-recourse notes partially offset by cash provided by operations.

The cash on hand covers the daily operations and the "special" dividend. In considering the dividend alone represents about a 8% return, I expect PDLI stock price to continue to climb toward the ex-dividend date.

Strategy ( 1) providing an oportunity to take a capital gain and sell PDLI b4 the ex-dividend date ... or (2) sell PDLI after the ex-dividend date and capture the dividend, part of the stock gain, less commissions, etc.

These regular quarterly dividend payers are good prospects too.

American Electric Power (AEP), the owner of the nation's largest electricity transmission system, have a 4.6% dividend yield.

PG&E (PCG), which provides electricity to more than 5 million California customers and natural gas to 4 million customers, pays 4.1%.

Consolidated Edison (ED), which keeps the lights on in (NY, NY) and supplies natural gas to more than a million NY customers, pays 5.1%.

PDLI close $6.63 +$0.41 +6.59% 8/2/2010

Insert grinning smiley face here

UPDATE 3-PDL plunges as Genentech patent claim puts rev in doubt

PDL BioPharma, Inc. PDLI.O $5.16 -0.02 -0.39% 12:49pm EDT
Roche Holding AG ROG.VXCHF 142.30 -0.30 -0.21%10:30am EDT
Fri Aug 13, 2010 3:58pm EDT

* PDL says gets Genentech letter on European patents

* Letter says some products do not infringe PDL's patents

* PDL to enforce rights to Europe patents through 2014

* PDL shares fall as much as 20 pct, touch 7-yr low (Adds CFO comments; updates stock move)

By Krishnakali Sengupta

BANGALORE, Aug 13 (Reuters) - PDL BioPharma Inc (PDLI.O), which licenses its technology to Genentech, said the biotech giant has claimed its drugs do not infringe PDL's European patents, throwing into doubt royalty revenue that accounts for about a third of PDL's sales.

---- http://www.reuters.com/article/idUSSGE67C0ER20100813?rpc=77

.. for the rest of the story go to the above link.