Wallace,
From the 8-K
"On August 29, 2001, the Executive Committee of the Board of
Directors of Nabors Industries authorized the continuation of Nabors' share
repurchase program and increased the amount of Nabors common stock authorized
for purchase by Nabors to up to $400,000,000, in the aggregate. As of the date
of this filing, Nabors has repurchased approximately $145 million of its common
stock, or 3,582,700 shares. These shares are now held in treasury. In addition,
Nabors has entered into two separate private transactions with a counterparty in
which we sold 2.0 million put options which, upon maturity during September
2001, will result in our purchase of 2.0 million shares of our common stock or
settlement in cash. If we purchase our common stock, we will pay an aggregate of
$86.9 million for such shares."
At today's prices, NBR is now underwater $36,440,000 on this put transaction. For a company with earnings of about $187 million, that's not a happy transaction, is it? Well, maybe Gene Isenberg doesn't walk on water, after all. You're supposed to be selling equity at the top, not buying it. Otoh, maybe there's something in the transaction which makes it a wash, or even an NBR gainer. If not, Gene should remember this for the future, sell puts on stocks which go up, not down.
Kb |
