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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) The threat of inflation By John Schroy, on March 31st, 2009 |  Leave a comment  The supremacy of the US dollar is not yet dead, but portents of a fatal cancer — inflation — are there for all to see. The extreme, profligate spending of the Obama administration, combined with populist, irresponsible bank lending policies promoted by Barney Frank and Chris Dodd, portend rising interest rates, the collapse of the bond market, and the end of dollar supremacy. Furthermore, a large part of the American electorate doesn’t understand or is unaware of what lies ahead. March 31st, 2009 | Print Article |  Email Article |  Topics: Barack Obama, Barney Frank, Bernard Madoff, Bill Clinton, China, Chris Dodd, Dennis Kucinich, Euronext, executive stock options, Fannie Mae, fiscal deficit, Freddie Mac, General Motors, IMF, industrialization, Inflation, Jimmy Carter, Lyndon Johnson, Monica Lewinsky, Nancy Pelosi, NASDAQ, NYSE, oil, OMX Group, reserve currency, Ronald Reagan, Stock Buybacks, sub-prime mortgages, Timothy Geithner, unemployment, US dollar, Warren Buffett | Category: Inflation, featured | Leave a comment |  Short urlThe end of an era? By John Schroy, on March 27th, 2009 | Leave a comment  Since 1982, US equities markets have been driven upwards by corporate stock buybacks. Federal Reserve flow of funds accounts showed corresponding sales of stocks by executives exercising options to take advantage of manipulated prices. The Crash of 2008 changed this pattern, driving equity prices down so that executive options were “below water”. Companies reduced buybacks due to tight credit and the inability of executives to benefit in the depressed market. March 27th, 2009 | Print Article | Email Article | Topics: Baby Boomers, Corporate Governance, dividends, executive stock options, fraud, Graham & Dodd, Leverage, price earnings ratios, Stock Buybacks | Category: Stock Buybacks, featured | Leave a comment | Short urlStock repurchases By John Schroy, on January 23rd, 2008 | One comment  On September 17, 2007, Capital Flow Watch called the top of the Buyback Bubble, issuing a warning that stock prices might be in for a sharp fall. Throughout the last quarter of 2007, stock prices fell as funding for buybacks began to dry up, while executives rushed to exercise stock options before they were ‘under water’. Equity sales by households are expected to continue, until executive options are ‘under water’ or until corporations run out of funding for stock buybacks, whichever is first. January 23rd, 2008 | Print Article | Email Article | Topics: Andrew Carnegie, Bill Clinton, Enron, Hillary Clinton, John Maynard Keynes, Lou Dobbs, McKinsey, Neil Cavuto, SEC Rule 10b-18, Stock Buybacks, sub-prime mortgages, US SEC, Wall Street Journal | Category: Stock Buybacks | One comment | Short urlFeatured articles on inside pages
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