michael,
As someone else pointed out earlier, they must think that they can get one heck of a return by investing their capital in themselves rather than in R&D. Remember, the stock buyback doesn't change the number of shares authorized. It merely temporarily reduces the float. When the time comes that JMAR can resell the shares they buy under this program, hopefully they will do so at a tidy "profit".
Somebody, somewhere in JMAR, has thought this thing through. If we invest in R&D, we can generate X% return on this money. If we leave it in a bank, we generate X% interest. If we buy bonds, etc... This person or group of people, likely including the CFO, has reached the decision that investing in their own shares is the best use of this $2M. It also should have the immediate impact of a slight rise in the stock price (because of the lower float), and the "beneficial" press they generate from announcing a buyback (probably a bit of sage advice from the new IR/PR folks). And also remember, they have only authorized the buyback, not mandated it, so if the announcement alone is successful in bringing about a halt to the bleeding in the share price, they might meet their presumed goal without having to spend one cent of the $2M.
All in all, I'm pleased with the announcement, but I don't think JMAR was the "late day buyer" we've seen, because I don't think that they could legitimately start executing the plan without having previously announced it publicly (press release like we saw today).
KJC |
