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Strategies & Market Trends : Asia Forum

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To: Zeev Hed who wrote (4912)6/29/1998 2:38:00 PM
From: Amelia Carhartt  Read Replies (1) of 9980
 
Zeev:

Here's a devious thought: Corporate repurchase of shares just exacerbates the bubble by creating a shortage of stock. The market is flooded with liquidity so the effect is predictable. The stock price inflates further without really creating any tangible value. Then management exercises options sells stock at inflated prices for a nice windfall. Insider are long gone at premium prices when the next thing you know credit tightens and the company re sells stock to raise capital.

Susan
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