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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) What would Adam Smith say? By John Schroy, on March 11th, 2010 |  2 comments  Most corporate executives of giant companies today are, in actuality, mere employees (‘workers’ in communist jargon) and are not capitalists or entrepreneurs at all. Their extraordinary remuneration schemes are provided without executives having employed or having risked any of their own capital and is often paid, even as a corporation slides into bankruptcy. Adam Smith recognized self-interest as a useful trait, but one that should not be allowed to override the nobler virtues. March 11th, 2010 | Print Article |  Email Article |  Topics: Abraham Lincoln, Adam Smith, Andrew Carnegie, Barack Obama, Capitalist Ideology, Communist Ideology, Corporate Governance, executive stock options, Frank Norris, Franklin Roosevelt, George Eastman, Gustavus Myers, Henry Ford, independent directors, John D. Rockefeller, Karl Marx, Lincoln Steffens, robber barons, Russian Federation, SEC Rule 10b-18, socialism, Soviet Union, Stanford University, Steve Jobs, Stock Buybacks, Thomas Edison, Upton Sinclair | Category: Economic Theory, featured | 2 comments |  Short urlCorporate governance By John Schroy, on March 10th, 2010 | Leave a comment  The webcast, This Week in the Boardroom, for February 25, 2010, discusses the issue of stock buybacks with Stephen Lamb, partner of Paul Weiss, a large international law firm prominent in the securities industry. Wall Street seems to have learned little from the Crash of 2008. The big law firms understand that the safe harbor provided by SEC Rule 10b-18 is still firmly in place; shareholders will continue to be defrauded by employee-directors with impunity. March 10th, 2010 | Print Article | Email Article | Topics: Corporate Governance, fraud, NYSE, Paul Weiss, SEC Rule 10b-18, Stock Buybacks | Category: Stock Buybacks | Leave a comment | Short urlEvolving economic thought By John Schroy, on March 5th, 2010 | Leave a comment  The August 13, 2009 issue of Business Week published an article, “The Buyback Boondoggle — Companies spend lavishly on share repurchases, slowing innovation and job creation”, by William Lazonick, a professor at the University of Massachusetts Lowell and director of the Center for Industrial Competitiveness. Because of the multi-trillion dollar scale of the enterprise, buybacks represent a fraud against the retirement plans of a whole generation on a scale that makes Bernie Madoff look like a piker. March 5th, 2010 | Print Article | Email Article | Topics: Capitalist Ideology, Corporate Governance, executive stock options, Stock Buybacks, University of Massachusetts Lowell, William Lazonick | Category: Stock Buybacks | Leave a comment | Short urlFeatured articles on inside pages
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