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Technology Stocks : Intel Corporation (INTC)
INTC 36.91-1.1%Dec 31 3:59 PM EST
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To: Lee Penick who wrote (39097)11/6/1997 12:41:00 AM
From: xstuckey  Read Replies (4) of 186894
 
"I can't remember....are these buy backs made with "earnings", or are they "pre bottom line expenses" and the earnings are still "all" there to continue to grow the company? Makes a big difference to me, and what goes to retained earnings I believe."

Hi Lee,

Of course it makes a big difference. It is my understanding that the funds used for stock buybacks come from retained earnings, yet are NOT charged against current earnings. They are in fact (since they recur year after year) an inducement to lure and keep employees. This is another way of saying they are a cost of doing business.

Why don't we be honest and just call them wages and salaries? They should be expensed, but then the P/E would approach 40.

Best Trading, X
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