Gazprom Does Not Pay Dividend and Plummets on the Stock Market

Gazprom Does Not Pay Dividend and Plummets on the Stock Market

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The Russian state gas company Gazprom will not pay a dividend this year. The company made that surprising announcement on Thursday.

 

Investors reacted with disappointment and sold their shares en masse, pushing Gazprom’s share price to more than 30 percent.

Gazprom said via Telegram that it would “not make sense” to pay a dividend in the current circumstances. For many small investors, those distributions are the very reason for owning the stock. Gazprom had previously promised investors a dividend of 52.53 rubles per share, converted just under the euro.

However, that proposal was rejected at the shareholders’ meeting. The number of dissenting votes roughly corresponded to the percentage in the company that is owned by the Russian state. The bonuses for the management were approved, presumably with support from Russia.

Gazprom stated in the explanation that the connection of Russian regions to the gas network, which requires the necessary investments, is more important. The government is also demanding more tax from the gas company.

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