SI
SI
discoversearch

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.
Technology Stocks : Creative Labs (CREAF)
CREAF 0.470-14.5%Jan 12 9:43 AM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: burn2learn who wrote (12040)8/16/1998 1:27:00 PM
From: Flint  Read Replies (2) of 13925
 
Fundamentally, the are two sides to the issue.

For most investors, sharebuybacks carry a lower overall tax liability.
Another positive on sharebuybacks are that they do create some buying

However, the drawbacks for sharebuybacks are that share buybacks cost existing shareholders. Apart from commission charges to brokers (perhaps low), any uptick DUE TO THE SHAREBUYBACK action alone is actually a cost that shareholders who stay behind in the stock are paying for.

Frankly, from my perspective as a shareholder, I'd just as well get Creative to pay me a significant tax-free dividend which I think they can. Why do they even try and pretend they can do better with a sharebuyback ? THey've earmarked US$100m for sharebuybacks. If they gave a special tax free dividend of US$1 per share, I'm pretty sure that'll boost the shareprice.. Of course that won't be positive for option holders who convert. Hence in SPH's case, they reduced the outstanding shares at the same time... hence still increased the value of the option stock.

Oh well. i've said my piece. Frankly, while I agree that sharebuyback will trigger buying action which will push the share price up, I'd rather have long term gains... i.e if Creative will have a progressive attitude towards returning cash to shareholders on a steady basis... rather than unpredictable one-offs.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News