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

To: Bill Martin who wrote (3065)	5/10/1998 8:02:00 PM
From: Hsien W. Chang	Read Replies (2) \| Respond to of 8218

Bill: Thanks for the reply. You did not quite answer my question! You have been maintaining that stockholders' equity decreases when a Company buys back its own shares. However, if a Company (IBM, say) should pay out the buy back cash as dividends instead of buying back stocks, the cash is no longer in IBM's pocket. What is the difference between paying out the cash as dividend or buying back stocks!! As you know IBM has been buying back its own stocks for quite a few years now. The stock repurchased in 1994 and 1995 are worth much more than that was paid by IBM. Similarly, the stocks they buy today and tomorrow may also be worth more than the purchase price! How is it that the stockholders' equity keeps on decreasing while the stocks IBM has bought back over the years are appreciating in value!! I don't quite understand!!