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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Joey Two-Cents who wrote (5923)	4/2/1998 10:47:00 AM
From: Pancho Villa	Read Replies (1) \| Respond to of 18691

>One other thing I was thinking about INTC buying back 100M of their shares for about $ 7B. Q: Why not pay a dividend? < In theory, if you don't have use for the money [i.e., no investment opportunities] you should give the money back to sotckholders]. A byuback is a form of doing this as it reduces the number of slices in the pie so you in theory you get the money anyways and pay no takes on the share appreciation. Your view is that you want the dividend in your pocket and pay short term capital gains takes on it. If you are long INTC because you like its prospects then I actually prefer the buyback. pancho

To: Joey Two-Cents who wrote (5923)	4/2/1998 1:42:00 PM
From: Gerald Walls	Respond to of 18691

One other thing I was thinking about INTC buying back 100M of their shares for about $7B. Q: Why not pay a dividend? A: Dividends are not paid on stock options and the only way the rich get richer is if they drain their coffers to prop up their stocks before cashing out. Alternate answer: share buybacks permanently increase shareholder value without causing a taxable event while dividends are a one-time boost and are immediately taxed as ordinary income.