SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Novell (NOVL) dirt cheap, good buy?
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: LB11 who wrote (29818)1/5/2000 11:04:00 PM
From: donnacat  Read Replies (1) of 42771
 
Reference Bloomberg Magazine, page 22&24, Jan & Feb 2000:
Buybacks Bite Back by Mathhew Stichnoth
"Increasingly, companies are using stock buybacks to fund management incentive options, in many cases borrowing to do so. " The company that would need to repurchase the highest percentage of outstanding shares to cover their option grants is Novell.

Options outstanding (millions of shares) 120.2
Common Shares Outstanding (millions) 335.0
Options as a % of shares outstanding 35.9

Next:
Adobe 32.9%
Apple Computer 32.8
Parametric Technology 29.1
Dell 28.4
Silicon Graphics 27.9
Cendant 25.5
Fruit of the Loom 21.2
And more on list

The article states the following:
"Of all the overrated, underscrutinized, and generally misbegotten actions that company management take 'for the benefit of their shareholders,' share buybacks must be near the top of the list. . . .these repurchases do is siphon assets away from more productive corporate uses. ? they can mask a transfer of wealth from stockholders to management. .. companies taking on more debt to fund buybacks."

Recent share buybacks do not reduce the company's shares outstanding - - when options are exercised the stock has to come from somewhere . Issuing new shares is dilutive, so typically company fulfills option obligations with shares it buys on open market which are very expensive today.

I do not know if Novell is planning a share repurchase program or if they have sufficient stock on their books to cover options - donna

PS long Novell and concerned
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News