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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Torty who wrote (2063)	2/22/1999 4:12:00 PM
From: Bosco	Read Replies (1) \| Respond to of 14638

G'day all - Torty, I do not see how a company's effort to repurchase its stock [for the right reasons, i.e., the best use of its cash position] can in any way erode investor confidence. Indeed, there may be times when a company [not NT in particular] may use a repurchase scheme to bump the stock price, but it is one of the few wrong reasons to do it. Other reasons may be 1) cash could be better deployed elsewhere [reinvestment and/or acquisition etc] or the share price is too inflated to begin with. These days, a lot of companies are doing as a way of giving tax free dividend, especially if repurchased stock is to be retired. It is simple mathematics. Even if it is not retired, and the repurchased stock is used for acquisitions and/or employees' option [where applicable,] it lowers the need for new issuance and thus prevention dilution. Therefore, it is indeed a good thing. At this point, IMHO, I do not see any of the negative reasons [as mentioned] and since 1) NT is still undervalue to its peer; 2) its cash flow is positive; 3) I will increase the values of my holding 4) without costing me any tax liability, what is not to like <G> hope this help but it remains JMHO best, Bosco

To: Torty who wrote (2063)	2/22/1999 4:41:00 PM
From: Stocker	Respond to of 14638

Torty, I agree pretty much with Bosco's post. Consider also that figures like earnings per share, revenues per share, debt to equity, etc. are calculated based on the number of shares outstanding. For the most part, fewer shares outstanding has a positive effect on those ratios, especially if the company buys back a lot of stock or does it over a long period of time. To me, the most important aspect of a buy back for a company like NT is that it gives them more flexibility in using stock to do future acquisitions. It also sends a message to the market that management feels the stock is undervalued.