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Technology Stocks : Compaq

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To: Merlo who wrote (54474)3/23/1999 4:03:00 AM
From: rupert1  Read Replies (1) of 97611
 
One of the surest signs that a stock is at or near a bottom is when shareholders start clamouring for the company buyback facilities to be activated.

COMPAQ is in the process of using cash to acquire assets to be bundled into AV. Those assets will be sold at a profit in 6-9 months when a portion of AV is sold as an IPO and the remainder of the shares, owned by COMPAQ increase in value. Would shareholders prefer to spend reserve cash buying back shares (which will be bought by the market anyway in a matter of days/weeks) or use it to make a profit on the AV deal?
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