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Technology Stocks : Intel Strategy for Achieving Wealth and Off Topic -- Ignore unavailable to you. Want to Upgrade?

To: margaret tasset who wrote (12483)	10/29/1997 12:49:00 PM
From: Sonki	Read Replies (2) \| Respond to of 27012

MUST READ (INTC) 85 CLOSED. After gaining more than $10 yesterday one day after it lost half that amount on Monday, the stock of this leading chip maker received a boost from some confusion regarding whether the company would soon authorize the buyback of additional shares. In order to meet its stock option obligations to its employees, the company buys back its stock in the open market to fulfill this need. During any given year, the company engages in these activities to meet these option obligations and the customary pattern is to buy back your shares when the stock takes a dip or looks weak in comparison to its perceived valuation. So far this year, through its existing share buyback program, Intel has bought back 7.7 million shares in the 1Q, 13 million shares in the 2Q, and 2.5 million shares in the 3Q. Thus, year-to-date, the company has bought back 23.2 million shares at a cost of $2.4 billion. However, contrary to some reports that surfaced in the media late yesterday, Intel said last night that it had no plan to increase its ongoing share buyback program as had been assumed the company might do following the announcement by IBM that it was increasing its share buyback program by $3.5 billion. That is, Intel will continue to buyback its shares as it sees fit, and like it has done in the past, to fill the needs of its options obligations, but at the moment it has no plans to increase the amount that has already been authorized. What does this mean for the stock today? Probably nothing because in most investors' views, the stock is still well regarded, it is a stock that most investors hold for the long-run, and the company still enjoys a substantial market share that gives it pricing power, particularly in the high-end of the market. Of greater importance for the stock today may be the price cuts of its microprocessors that will go into effect November 1. Prices are expected to be reduced by 13% to 40% which are less than the price cuts announced in August of 30% to 50%. Even so, while Intel is prompted to reduce prices in order to keep competitors at bay, the stock still looks well priced in comparison to valuations that prevailed not too long ago when the stock was above $100 a share. Then again, the world economic outlook was much different back then. M, thank for your motivating posts to get me off my seat and get moving. Your msgs are perhaps the most valuable msgs as it relates to something I value a lot more then $$$ ! thx.