CHARLOTTE OBSERVER 

CHARLOTTE - Wachovia's move to nearly eliminate its dividend means a big change for its

stock.Although it's bound to be less attractive to investors looking for reliable and lucrative

payouts, the moves the Charlotte bank announced Tuesday provided encouragement to

some local investors and financial experts."I could see yield-conscious investors walking

away or looking for something else," said John Gugle, a certified financial planner with Alpha

Financial Advisors in Charlotte. "But these are good moves if I'm an investor that's looking

for confidence in the long term."Wachovia's stock soared 27 percent on Tuesday's news,

which included layoffs and a shakeup of its mortgage unit.Along with a huge quarterly loss

and layoffs, Wachovia announced it will cut its quarterly dividend to 5 cents a share from

37.5 cents, its second dividend cut this year. At the beginning of the year, the bank paid 64

cents a share.Slashing the dividend will be a blow to older, retired stockholders for whom

dividends are a source of income, but it is a sign of necessary change for long-term

investors, Gugle said."I think what it signals to investors is, 'Wow, they're really serious

about this,' " Gugle said. "But some yield-focused investors are definitely going to get

hurt."Although financial planners said bank stocks are normally a safe bet for short-term

yield, banks have been hit by a tough market. According to SNL Financial, 109 banks have

cut their dividend since January 2007, 28 of which made cuts since early June.Bill Baynard,

managing director for Charlotte-based Novare Capital Management, said stockholders now

have to determine the likelihood of Wachovia's return to success."If I believe that Wachovia

is going to turn the situation around, I'm going to hold the stock," Baynard said. "No

company wants to cut their dividend, so this is about preserving capital and proving that

they can do better in the future."