Given that the immediate impact of the COVID-19 pandemic on world economic activity could reasonably be expected to lead to extremely significant reductions in cash flows for many companies—at least in the short-term—the dividend omissions and reductions noted in Section 2 above (almost all of which preceded reported losses) may be viewed as rational, survival-motivated “anticipatory strikes.” 4.
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The sentences
In an extremely thorough work, Michaely, Thaler, and Womack (1995) examine the share price, volume, and clientele effects of dividend initiations and omissions and conclude that, whereas there are highly significant changes in share prices in response to both events, there is little impact in terms of either trading volume or changes in institutional holdings.