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| Subject: Stock Buybacks In some countries, including the United States and the United Kingdom, corporations can buy back their own stock in a share repurchase, also known as a stock repurchase or share buyback. There has been a meteoric rise in the use of share repurchases in the U.S. in the past twenty years, from $5b in 1980 to $349b in 2005. A share repurchase distributes cash to existing shareholders in exchange for a fraction of the firm’s outstanding equity. That is, cash is exchanged for a reduction in the number of shares outstanding. The firm either retires the shares or keeps them as treasury stock, available for re-issuance. Under U.S. corporate law there are five primary methods of stock repurchase: open market, private negotiations, repurchase put rights, and two variants of self-tender repurchase, a fixed price tender offer and a Dutch auction. (Wikipedia Feb 2010) Stock buybacks By John Schroy, on November 3rd, 2006 |  Leave a comment  Trial lawyers are showing interest in the apparent conflict of interest when insiders use stockholders’ money to buy back shares on the theory that they are undervalued, and at the same time are unloading their own shares. Legal action in this direction could threaten the equity market, given the importance of stock buybacks in keeping prices up. If stock buybacks were to cease, for any reason, the market could crash, which might wake the SEC from its slumbers. November 3rd, 2006 | Print Article |  Email Article |  Topics: Corporate Governance, executive stock options, Harvard Business Review, Lerach Coughlin, Stock Buybacks, US SEC, Warren Buffett | Category: Stock Buybacks | Leave a comment |  Short urlWorld economy By John Schroy, on October 10th, 2006 | Leave a comment  Thirty years ago, about the time the world went off the gold standard, US income from abroad was more than double the amount of income that the US paid to the rest of the world. This surplus of investment income from abroad has been gradually diminishing. This year, or the next, this foreign income surplus may disappear forever. Does this mean that the US is ‘losing its groove’? October 10th, 2006 | Print Article | Email Article | Topics: Baby Boomers, Capitalist Ideology, Corporate Governance, dividends, Globalization, gold standard, Stock Buybacks, US taxation | Category: Foreign Investors, featured | Leave a comment | Short urlQ2 2006 By John Schroy, on October 6th, 2006 | 2 comments  Net share repurchases by nonfinancial nonfarm corporations ran at an annual rate of $554.8 billion, about the same level as in Q1 2006 and more than ten times the level of 2001 and five times the level of 2000, the peak of the Great Bubble. Amounts paid to exiting shareholders (including holders of executive options and short sellers) exceeded amounts paid equitably to all shareholders as regular dividends by 44%. October 6th, 2006 | Print Article | Email Article | Topics: Corporate Governance, executive stock options, Stock Buybacks | Category: Stock Buybacks | 2 comments | Short urlFeatured articles on inside pages
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