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To: WalleyB who wrote (763)	11/11/1998 1:06:00 AM
From: Toby Zidle	Read Replies (2) \| Respond to of 1147

Help me understand why institutions would oppose a company buying back its own stock. You say that it means the 'stock is in trouble and they want to shore up the price.' Yes, the stock may be in trouble and the company does want to shore up its stock price. Why would institutions owning the stock object to shoring up the price of stock in their own portfolios? Even if the 'stock' is in trouble, it doesn't mean the company is in financial difficulty. Generally, the company will have excess cash and finds its own stock to be cheap and an excellent investment. Many VERY Blue Chip companies (including IBM) have bought back their own stock. Not only does a stock buyback typically support the stock price, it also improves the 'per share' performance measures of its remaining stock. Further, stock bought at (say) $30 and kept in company treasury may be used for acquisition purposes when the stock later may be at $45. To pay for another company with stock that cost your company $30 would seem like sound financial management. So it's not clear to me why institutions should object to stock buybacks. It benefits them too.