Roger's 1998 Short Picks Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Roger's 1998 Short Picks

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: taxikid who wrote (11779)	7/21/1998 8:12:00 AM
From: Graeme Smith	Read Replies (1) of 18691

I was thinking more in terms of a conflict of interest for the management. In a company like Avanti, Zona etc. they obviously need money to plug in the holes, fight court battles, promote their products etc. However this is not going to affect the companies bottom line for possibly even years out. By buying back stock the management reduces the float, increasing the insiders shares as a portion of the entire float and making them more valuable. It seems to me to be a good way of using company money to make the management richer. Admittedly theoretically the market should take account of the reduced assets of the company and the affect on future credit. However theoretical and reality are rarely close. Rather stock buy backs are considered to mean that the management have confidence in the future of the stock and so the stock must be more valuable. I'm sure that most stock buy backs are done when the stock is undervalued, but there still seems to me to be some conflict of interest when management are rewarded according to stock performance. Also Mr Kid, call me graeme. I haven't been called Mr Smith since I got caught smoking in the toilets at high school. Graeme

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next