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Politics : Formerly About Advanced Micro Devices

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To: Bill Jackson who wrote (36182)8/18/1998 10:56:00 AM
From: d[-_-]b  Read Replies (2) of 1570603
 
Bill, RE: What happens when they buy up all the shares?

Well I guess they'd go private by the board, but I believe buybacks are authorized by the shareholders. Further most companies may have a few bucks in the coffers, but enough to buy out the whole company?

Reason to buyback shares:

Bolster the Stock Price
Increase Book Value Per Share
Increase Earnings Per Share
Taxes are lower for buybacks than for dividends
Replenish the pool of stock available for employee incentive options
Counteract the dilutive nature of employee incentive options
Fend off hostile suitors

All of these are valid reasons for a buyback, but one other would be to placate the shareholders and analysts - it's fashionable and expected.

As for buying and selling shares in the span a few days, this is illegal, SEC filings are required for both transactions.

Eric.
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