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Technology Stocks : Nortel Networks (NT)

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To: Torty who wrote (2074)	2/23/1999 8:41:00 PM
From: Bosco	Read Replies (1) of 14638

Hi Torty; you asked Your arguments make sense to me, but I am confused about your statement that "cash could be better deployed elsewhere [reinvestment and/or acquisition etc]" as an explanation for a company repurchasing its shares. Doesn't the company reduce its cash when repurchasing? oops, I got you confused <sorry>. I ve listed a set of conditions in which stock repurchasing is not a good thing, and you are right, if cash can be better used for other purposes, it is not a good thing [this is when I said "... but it is one of the few wrong reasons to do it. Other reasons [editor note: this 'reasons' refers to the preceding boldfaced wrong reasons] may be 1) cash could be better deployed elsewhere [reinvestment and/or acquisition etc] or the share price is too inflated to begin with."; and then I ve listed a set of benefits for stock repurchasing, especially when none of the elements in the 1st list is present. Then, I concluded that in NT case, none of the negative is present and hence the positive results will not be negated. hope I am not getting more confused <sg> best, Bosco

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