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Technology Stocks : IBM -- Ignore unavailable to you. Want to Upgrade?

To: Robert Scott Diver who wrote (6985)	11/12/2000 6:22:42 PM
From: chic_hearne	Respond to of 8218

Would you care to explain why you think buybacks are "ridiculous". IMHO this isn't the view of the majority on Wall Street. IMHO, buybacks that IBM is doing are far better than the dilution that is happening with stocks like Cisco and their excessive granting of stock options. Would you rather have buybacks like IBM or 80,000,000 new shares per quarter like Cisco? IBM has other problems, like a deteriorating balance sheet and this in part is being fueled by buying back shares with money they don't have.

To: Robert Scott Diver who wrote (6985)	11/14/2000 4:07:09 AM
From: J. P.	Read Replies (2) \| Respond to of 8218

IBM has a solid plan. They issue debt (they're known as one of the best timers for issuing debt at rates favorable to themselves). Then they use that money from the debt issuance to buy back their stock (good timers there also). They reduce the float and boost their EPS and are able to see returns on capital for their debt issuance that are fantastic due to the self fulfilling rise in the price of the stock they bought back. I'm sure this "business plan" has it's critics but it is a great way for a company, which is already operating off a huge base, to incrementally increase their EPS by leveraging the debt and equity markets. It would be difficult for any company as large and diverse as Big Blue to increase bottom line in the double digits any other way.