<Believe it or not, SEG and QNTM are not buying back shares to prop up your stock price ( though it helps). They are doing it to increase the percentag of their business you own because they believe someone else is willing to sell too cheaply. -Z>
Is it really so black and white? Seems to me that stock buy backs are a sign that a company has cash and they have no better use for it than buying back shares.
Once they buy them back, they often give them to employees. In a way, they reduce the float of shares and increase value, but these shares are not actually retired. They are just held in reserve until the company uses them.
So, does the company prove to be a good stock market timer and do they buy when prices are low and sell when they are high? That's another story. Dell has, if you can believe it, made more money selling options on their own stock than they've made selling computers.
So, if Quantum for example, bought 1 million shares at $15 and then sold them for $25, would you see them creating 10 million dollars to add value? Some companies do it, but not many.
Anyway, when a company goes to market to buy stock, they certainly make share prices go up, or at least stem a falling trend.
Regards,
Mark |
