Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (82792)	8/9/2000 9:42:08 AM
From: Don Lloyd	Respond to of 132070

mike - [Don, although company management seems to feel otherwise the shareholders are supposed to be the owners of the company - and when the shareholders money is spent buying back shares ( at historic high prices) to offset dilution from esops or their equity is diluted via generous option grants I do not feel that this is in the best interest of the shareholders -the owners of the company. In the old days surplus cash was paid out in the form of dividends and the dividend yield would act as a floor for the stock price. ATT - (T) had a 16% dividend yieldat the bottom in 1932. You raise many good issues but I feel the shareholders are being scammed in the long run. In the short run everyone is happy.] If the numbers were known, I suspect that that 90% of the companies make bad buyback decisions to use up shareholder cash and cause the market value of the company to depend more on market psychology than on solid financial fundamentals. Going out on a limb, I also suspect that a surprisingly small number of companies, perhaps 10-20%, dilute their shareholders excessively. This would be judged on the basis of annual rate of dilution (sans buybacks), and would take into account the presumably real positive cash flows from option exercises and tax deductions. Many then would still fall into the first camp, with excessive buybacks. In any case, the proof is in the retained value of the ownership of the shareholders. Regards, Don