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Leica Camera increased dividends


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I question if it is smart move to pay out a hefty dividend in Leica Camera's situation. Isn't it smarter to turn the profit around, keep it within the company, and invest more heavily in product development? The digital M is not really up to competition yet and the S-series is in a critical introduction stage; a bird that not yet has taken off.

 

But these kinds hefty 'milking' of companies is typical of the 'private equity funds' like Blackstone that soon owns 'everything' around. Blackstone with it's 44% share of Leica Camera surely expects a hefty return on their investment. It would not surprise me that the dividend is not the only 'return' Blackstone is harvesting from Leica Camera. With seats on the board private equity companies 'milks' their investments in several ways. Typical is hefty fees for 'consultations' or 'group commissions/franchise fees' etc.

 

Sure, a company must be profitable. But I see Leica Camera as being in a development stage right now. Leica is just about to enter, really, the digital camera market. Their position in this market is far from sure. I would have waited with dividends for a few years.

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