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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 March 18th, 2006 |  Leave a comment  In a major article on March 18, 2006, the Wall Street Journal reported that the Securities and Exchange Commission was investigating the possibility that corporate executives were back-dating their stock options to achieve greater profits when these options were exercised. The article did not mention stock buybacks, nor the link between stock buybacks and the legalized price manipulation that is the key to giving value to executive options. March 18th, 2006 | Print Article |  Email Article |  Topics: executive stock options, market manipulation, SEC Rule 10b-18, Stock Buybacks, US SEC | Category: Stock Buybacks | Leave a comment |  Short urlCorporate governance in 2005 By John Schroy, on March 16th, 2006 | Leave a comment  Repurchases of company stock, mostly under the safe harbor exemption from market manipulation provided by SEC Rule 10b-18, set an all time record of $366 billion (net) in 2005. This was 260% of levels in 2004 and 880% of buybacks in 2002. Despite extremely aggressive tactics of corporate management to manipulate stock prices upwards and give value to option and bonus plans, stock prices rose only about 3% in 2005, on average. March 16th, 2006 | Print Article | Email Article | Topics: Corporate Governance, executive stock options, SEC Rule 10b-18, Stock Buybacks | Category: Stock Buybacks | Leave a comment | Short urlUS Equities 2005 By John Schroy, on March 14th, 2006 | Leave a comment  Net sales of mutual fund shares dropped to the lowest point in the three years 2003-2005, with net sales of $257.5 billion. Net sales of mutual funds fell almost 14% from 2004 to 2005. Weak fund sales in combination with historical over-valuation of stocks and the impending retirement of baby boomers, are a portent of weakness in the US equity market. March 14th, 2006 | Print Article | Email Article | Topics: mutual funds, Stock Buybacks | Category: Small Investors | Leave a comment | Short urlFeatured articles on inside pages
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