A question on Novell's new share buyback program. The old program of June 98 has retired almost 35 mil shares, spending around $450 mil. The new program "can" spend up to $500 mil dollars to buy back additional shares with the objective "to maintain a fairly constant weighted average share count....of 350 mil shares". Question: Is Novell's use of share repurchase for issuing stock options on par for what other high tech companies (e.g. MSFT, CSCO, AOL, etc) issue? Is it similar, less than or greater than? I'm curious, as it seems to me that spending $1 billion over 2 years to meet the needs of exercised options is an expensive objective, but I understand the value of keeping the share count even. Does MSFT just allow their outstanding share count to grow via issued options rather than repurchasing as Novell is doing? I know a few of you who post here have a better handle on this type of activity. My initial impression during the first June 1998 announcement was that Novell was also trying to reduce their number of outstanding shares from 350 mil to more like 320 range. TIA, QuadK
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During the quarter, the company spent $57 million to repurchase 4 million shares of Novell common stock. On June 5, 1998, Novell's Board of Directors authorized the company to repurchase up to 10 percent, or approximately 35 million shares, of Novell common stock over 12 months. To date, the company has spent $448 million to purchase and retire 34,550,000 shares of common stock that were authorized for repurchase.
Recent Board Actions
On July 26, 1999, Novell's Board of Directors authorized up to $500 million for a share repurchase program through October 31, 2000, with the intent of offsetting the impact of exercised stock options and the effect of the Treasury method of accounting for outstanding stock options. The objective of the new plan is to maintain a fairly constant weighted average share count of approximately 350 million shares. |
