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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) Corporate governance By John Schroy, on August 31st, 2006 |  Leave a comment  The Harvard Business Review (September 2006) featured a lead article by Professor Alfred Rappaport of Northwestern Univerity’s Kellog Graduate School of Management that questioned stock buybacks at prices above intrinsic value. However, Professor Rappaport didn’t object to buybacks below intrinsic value, as had Benjamin Graham, Warren Buffett’s mentor and guru. August 31st, 2006 | Print Article |  Email Article |  Topics: Benjamin Graham, Corporate Governance, David Dodd, Harvard Business Review, Security Analysis, Stock Buybacks, Warren Buffett | Category: Stock Buybacks | Leave a comment |  Short urlUS equities By John Schroy, on August 24th, 2006 | Leave a comment  There is a common belief that a managed, diversified portfolio of US common stocks provides protection against inflation. However, there is reason to question whether this protection currently exists. Considering today’s equity prices, relative to intrinsic values, there is doubt as to whether common stocks offer the level of protection against inflation that many presume. August 24th, 2006 | Print Article | Email Article | Topics: Common Stock, common stock legend, dividends, Gold, Inflation, intrinsic value, price earnings ratios, S&P 500, Stock Buybacks, US taxation | Category: Inflation, featured | Leave a comment | Short urlStock buyback paradox By John Schroy, on August 7th, 2006 | Leave a comment  With prices falling after the market peaked in 2000 and with massive net sales of stocks indicated by the Federal Reserve flow of funds accounts, how can the percentage of assets represented by stocks still be about the same as in 1995? The apparent paradox of selling without reducing holdings can be explained by two common operations described in this article. August 7th, 2006 | Print Article | Email Article | Topics: executive stock options, short selling, Stock Buybacks | Category: Stock Buybacks | Leave a comment | Short urlFeatured articles on inside pages
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