Ramsey, If Dell or anyone else sells a security, whether put warrant or stock or convertible, all info the co. knows about business has to be revealed or it is illegal. That is why they have all those prospectuses when they sell a public issue. The law is the same for private sales, but I am sure the SEC is not as prone to look into those as they are when the public gets ripped.
Generally, they report such trades en masse in footnotes to the financial statements. If an obligation is still intact, they have to list some details of the obligation. I have never seen a schedule breaking down what they sold at what price, though I wouldn't be surprised if the SEC doesn't receive a copy of such a schedule.
Yes, buying back shares for a corporation is fairly severely regulated, as the SEC likes to make certain that the co. is not running the shares. In general, they have to buy at the bid side. The trader has to stamp the time of the order with the bid to offer at that time. And if the stock declines, the trader has to keep moving to the bid. Pain in the butt.
The $300 million investment profit does not come from put warrants, as that goes into capital. The interest earned on the cash generated does show up as investment income. All the major put warrant players have backed off. We don't know why, as most are firms that never tell the truth, Dell, INTC, MSFT. I suspect the SEC is clamping down on this scam, or perhaps the IRS is taking another look at it. |
