Einsteins Special Dividend

I wrote last month that Einstein’s (BAGL) stock price could possibly appreciate as much as $5 if its proposed recapitalization transaction goes through. Einstein was proposing a $9 special dividend financed through debt.

Last week, it announced a $4 special dividend payable on December 27, 2012. The ex-dividend date will be December 28, 2012.

The stock currently trades at $16. If the shares dip to the low $15 range before the dividend, I might initiate a small position. After the special dividend, I expect the stock to trade between $12-$13. At this price, the dividend (.50/share) yield will be around $4%.

Disclosure: I do not own BAGL

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