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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Brendan W who wrote (6488)	3/30/1999 8:52:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 78515

OK, so, you're right if you're talking about about aggregate book value. I made your argument at the beginning of the Buffettology thread to explain what was up with Coke. Sorry for commenting without reading closer. Mike

To: Brendan W who wrote (6488)	3/31/1999 1:30:00 AM
From: Bob Rudd	Read Replies (2) \| Respond to of 78515

Book value declines with share buyback: Basic accounting equation Assets - Liabilities = Equity [Book value] Let assets = 100; Liabilities = 40 then 100 - 40 = 60 What happens when we subtract 20 from assets [cash]to rupurchase shares? 80 - 40 = 40 Book value decreased by the amount assets are decreased. In this simple example, if the company started with 60 shares and bought back 20 thus reducing the outstanding share count to 40 would the 20 bought back be entered as treasury stock and thus there would still be considered 60 shares in which case BV/share would decrease ...or would just the 40 in the hands of external shareholders count in which case the BV/share would remain constant?