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

To: Hsien W. Chang who wrote (2330)	1/28/1998 5:57:00 PM
From: J R KARY	Respond to of 8219

Your buy back question to Earlie deserves a verified answer I for one can't understand how they believe that purchasing shares with (retained) earnings , which then becomes treasury stock , reduces assets . Typically , when not wearing their silver INTEL clean room suits, they point to generalized concepts as proof of IBM's treachery . Maybe they can identify on IBM's annual report exhibits how they arrive at their proof that IBM is borrowing to buy its stock . I trust depreciation expense (P&L) and/or normal asset capitalization are not being considered as actual reductions to shareholder equity. Jim K.

To: Hsien W. Chang who wrote (2330)	1/29/1998 10:55:00 PM
From: Earlie	Read Replies (2) \| Respond to of 8219

Hsien: You are quite correct in pointing out that the company does not go out and borrow just to buy back stock. I was attempting to point out that if the company did not buy back $8.0 billion of stock last year, it would not have needed to borrow at all. I guess my point is that the dough might have been better spent on the business itself. It doesn't make much sense to raise money in either the debt or equity markets, (usually at a discount), only to turn around and spend it buying back stock at the peak of the market. The usual process is to sell stock or borrow to further the company's business plan. My other point was that the stock has seen its multiple doubled over the last 18 months in spite of flat revenues and flat earnings. Best, Earlie