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Technology Stocks : Network Associates (NET)

NET 186.26

-2.7%

3:59 PM EST

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To: Edwarda who wrote (5397)	6/21/1999 1:45:00 PM
From: Chuzzlewit	Read Replies (1) of 6021

Possibly true, but the success of the share buyback would depend on the market's acceptance of the stratagem as a demonstration of management's belief that the shares are undervalued. If financial mathematics holds sway the price per share will move in accordance with arithmetic I outlined in a previous post. In other words, it would be a wash for the wealth of the individual investor, but a decrease in the total capitalized value of the company. I think the success of your gambit requires a rather significant shift in investor psychology. But don't you think that approach is needlessly complex? Why not use the cash for acquisitions rather than a buyback? I recognize that much of the short-term price movements in the market are predicated on investor sentiment, and financial mathematics can't predict that. Can changes in investor sentiment be measured when buyback plans are announced? It might be an interesting bit of research. TTFN, CTC

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