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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: jimleon who wrote (52141)	7/18/1998 2:23:00 PM
From: Richard F Hanover	Read Replies (1) \| Respond to of 176387

Would Dell, by buying back and retiring its stock, have the effect of increasing the stock's share price due to the fact that there is less supply for the demand? Or is the amount of stock repurchased diminimous? Rich

To: jimleon who wrote (52141)	7/18/1998 3:42:00 PM
From: Chuzzlewit	Read Replies (4) \| Respond to of 176387

Jim, first, I agree entirely with your remarks concerning splits. This is greater fool trading system! I think that the academic community is split on whether stock buybacks increase shareholder value. If the stock is "undervalued" (and I won't attempt to describe how to value a growth stock -- I don't think there is a decent model around), I think that stock buybacks will certainly enhance value. But if stocks are properly valued as the strong form of the efficient market hypothesis maintains, then stock buybacks are irrelevant. Clouding the issue still further, isn't a firm the ultimate insider? And if the semi-strong (or weaker) form of the efficient market hypothesis is true, couldn't you argue that this would indeed add to shareholder value? A more practical issue is the best use of cash. What does a company do with excess cash that cannot be reinvested by expanding business capacity? Could we not think of share repurchase as a more tax efficient dividend (since the "dividend" is now converted to a capital gain)? I look forward to reading your comments. TTFN, CTC PS. Have you been watching the TLAB story unfold this week. As a famous ex TLABer was fond of saying "cha-ching"!