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Biotech / Medical : VD's Model Portfolio & Discussion Thread

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To: scaram(o)uche who wrote (2809)	10/9/1997 6:40:00 PM
From: lrb	of 9719

Rick, Where does the $400 million figure come from? The press release talked about up to 2.5 million shares. At $35/share, that's less than $90 million. The release cited the company's stock purchase and stock option plans as possible uses for the repurchased stock. The 1996 10K shows 1.9 million shares granted in options for that year, so the 2.5 million figure is not unreasonable to prevent dilution. As employees exercise their options and purchase shares under the employee stock purchase plan, cash comes back to the company. This cash represented $20 million in 1996. (This for options much cheaper than any that would be granted today). So the expense of this stock buyback is not as great as it might first appear. As a rule, I approve of this sort of buyback to support employee ownership programs. I admit that I have no knowledge of Biogen's situation in particular.

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