Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : Hearx(EAR) -- Ignore unavailable to you. Want to Upgrade?

To: DONNA DRANE who wrote (326)	12/6/1998 1:36:00 PM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 383

DONNA, The share buybacks will be reported in either the quarterly or annual reports, likely both. Additionally, if you'd like to get the numbers a bit earlier, you can call the transfer agent for HearX and get the outstanding shares numbers from them. I'm not sure who is the transfer agent for HearX. Your assumptions regarding news versus stock price are somewhat correct. However, one of the company objectives is to have the stock price rise so that their total capitalization rises. Higher capitalization is better than buying stock back at deflated prices. Higher caps gives the company the ability it needs to raise investment funding, either through issuing more shares (or bonds) or through bank loans and other such methods of financing growth. Also, when going the bond or loan route, higher caps gives the company the ability to negotiate better terms (such as a lower rate of interest). You can look at a buyback program somewhat like this analogy. Imagine you run out of gas on the freeway. You can go to a gas station, get a little can of gas, pour most of it in the tank and save a little tiny bit to prime the carburetor. Then you drive to the gas station and fill the tank. You could continue to walk back and forth to the gas station and fill the tank a little bit at a time with that little can of gas, but would you? The stock buyback works similarly. The company's stock price runs out of gas and the company primes the stock price with a little buyback. They don't want to put too many dollars in the buyback because they need the capital to expand. So they invest just enough to get it going again, and then let the market "fill 'er up". KJC