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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) US SEC By John Schroy, on April 2nd, 2006 |  Leave a comment  The Financial Accounting Standards Board (FASB) is made up of seven members, six of whom are either ex-partners of major accounting firms or former high-ranking financial executives of their clients. Accounting practices and standards have a profound effect on capital flows, measured in hundreds of billions and even trillions of dollars. The interests of the issuers of securities are quite different from those of small investors who own these securities. April 2nd, 2006 | Print Article |  Email Article |  Topics: executive stock options, FASB, Joseph Kennedy, mutual funds, Stock Buybacks, US SEC | Category: US SEC | Leave a comment |  Short urlFASB By John Schroy, on April 1st, 2006 | Leave a comment  FASB concept statement No. 5 represents a further slow tightening of the screws as to the way pension liabilities are reported — one step in a long, excruciating journey that has been underway for decades. This rule is expected to have an incremental negative impact on old, unionized companies, further decline in private defined-benefit plans, and higher state and local taxes. April 1st, 2006 | Print Article | Email Article | Topics: FASB, Full Disclosure, pension plans, Stock Buybacks, trade unions, US taxation | Category: Financial Market Regulator | Leave a comment | Short urlStock buybacks 2005 By John Schroy, on March 22nd, 2006 | Comments are closed  A careful examination of the flow of fund accounts for 2005 suggests that probably not more than ten to twenty percent of proceeds from the exercise of stock options were channeled back into the stock market. In order for ordinary investors to benefit from the buyback option programs, they would have to sell 3.5% of their indirect holdings in equities and put the money elsewhere. Without doubt, such sudden ‘rational behavior’ would crash the stock market. March 22nd, 2006 | Print Article | Email Article | Topics: executive stock options, Investment Company Institute, irrationality axiom, mutual funds, Stock Buybacks | Category: Stock Buybacks | Comments are closed | Short urlFeatured articles on inside pages
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