One Factor Driving Down United Online (UNTD) Today

NEW YORK (TheStreet) -- United Online (UNTD) was dropping 11.24% to $10.75 on Monday afternoon after the online retailer announced it would discontinue cash dividend payments.

The company made the announcement on Friday after the market had closed. United Online discontinued the payments "in order to provide financial flexibility to support anticipated long-term growth initiatives."

"Since I joined United Online nearly three months ago, the company has started to lay the foundation for a new, growth-oriented strategic direction," said President and CEO Francis Lobo in the company's statement.

"We are undertaking several key initiatives, which include optimizing our current product offerings to enhance our consumer value proposition; expanding new product development efforts to drive new revenue growth; and pursuing new strategic partnerships and other opportunities to expand our scope and reach. In order to ensure maximum financial flexibility as these initiatives unfold, the company's Board of Directors has determined to discontinue quarterly cash dividend payments.

"United Online has a strong balance sheet and will use its existing cash and free cash flow to support these and other initiatives that are designed to create long-term stockholder value," Lobo added. "Also, the company maintains a stock repurchase plan and would consider using it as an additional means of creating value for our stockholders."

United Online, which formed in 2001 by the merger of NetZero and Juno Online Services, plans to release its fourth-quarter and full-year fiscal results for 2013 on Feb. 19. The company plans to report approximately $68 million in cash and cash equivalents as at Dec. 31.

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