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Pastimes : Ask Mohan about the Market

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To: Jack Clarke who wrote (15536)	4/24/1998 12:27:00 AM
From: Mike M2	Read Replies (2) of 18056

Jack, I agree with you. Another point is as the stock rises the company can buy fewer shares but it has been an effective ploy to pump up your stock KO & CCI are two great examples. Buybacks increase eps but not earnings but many of todays mkt participants don't look beyond eps and did they beat expectations( never mind that the analysts lower the estimates so the company can beat them- IBM in 2Q96 started out with estimates of $3.25 for the quarter and ended up reporting $2.51 which beat the lowered estimates.) I also agree with a later poster that the share buybacks feed the esops. the accounting for options is another scam in effect they take a portion of employee compensation (the options)off of the income statement and shift to the balance sheet. In addition the company gets a tax deduction for the capital gains which the employee pays. Mike

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