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Technology Stocks : Network Associates (NET)

NET 200.93

-1.6%

Dec 5 9:30 AM EST

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To: deeno who wrote (5270)	5/11/1999 2:39:00 PM
From: Chuzzlewit	Read Replies (1) of 6021

Sure, this is a common method for companies to boost eps. First you sell puts and pocket the cash. It never show up on the income statement. If the stock is put to you you have partially mitigated the price drop. DELL and MSFT use this technique. The eps boost is due to the fact that there are fewer shares outstanding. Notice also, that stock buybacks are tax advantaged dividends. Finally, a stock buyback in a company with a very depressed share price is often seen as a palpable sign that management considers the stock undervalued. TTFN, CTC

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