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.

Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Ausdauer who wrote (5458)	4/15/1999 6:40:00 PM
From: Don Hess	Read Replies (1) \| Respond to of 60323

Aus - "Having $125 million on the books and being able to own some of your own company..." When a company buys back shares, they don't hold them. The shares disappear. It is reverse dilution. All it does is (hopefully) reward stockholders in a non-dividend fashion by effectively increasing the shareholders' percentage of total owned equity. - Don

To: Ausdauer who wrote (5458)	4/16/1999 8:27:00 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Aus and Don: There is no question that if the market price of a stock goes below book value, it may make more sense to buy the stock than to invest in new opportunities. My point is this: When SNDK was trading below 7 last October, what would have happened if the company had decided to buy back a significant number of shares, say, a million or so, representing about 4 percent of outstanding shares? Based solely on market dynamics, that large a purchase would have a major impact on the price of the shares, both because of the quantity being bought and because of the reporting requirements under the securities laws. Another point: Presumably SNDK didn't sit on its cash horde but invested it in a manner that produced a reasonable return. Even with interest rates as low as they are, it is not difficult to find short term investments that yield upwards of 7 percent, meanwhile providing the flexibility needed for meeting other obligations. Art