If you go to SI DELL profile, you will see that DELL bought back 14mm shares last quarter. That would cost them about $500mm. Man, borrow money to buy back shares, crazy!
SS, Your figures would suggest they paid about $35.75 a share...
14,000,000 x $35.75 = $500.5M ... And if they are buying back their shares at $35 when the market price is $65, I am certainly not going to argue with them.
Besides which, debt interest is an expense, which can be charged against taxes. At the current low interest rates, they can borrow money to build production facilities which will generate *slightly* <vvbg> greater revenues than their debt cost... And which can also be depreciated. Where is DELL located on the list of revenue generated per employee?
It should make Jim Patterson happy -- as I recall he was very uncomfortable that DELL had such a high price to book ratio, and this should help bring that down by increasing DELL's book. <vbg>
I think it is an excellent move.
Regards, 3. |
