Stock Buyback Plans Flood Wall Street
Companies with cash on hand are taking advantage of depressed stock prices in their own stocks by announcing big buy back programs. This is a strategic move that could give long term investors of these stocks something to cheer about.
Today there have been three major stock buybacks announced already and I am sure many more are to follow.
1. Microsoft (NASDAQ:MSFT).
Microsoft today announced that its board has approved a plan to buy back up to another $40 billion worth of its shares of stock. The company just recently completed its last repurchase program, and also raised its quarterly dividend from 11 cents to 13 cents.
2. Hewlett-Packard (NYSE:HPQ). Hewlett-Packard has announced another $8 billion share buy back, adding to its latest $8 billion share buy back program started in November of last year. The company currently has 2.5 billion shares of common stock outstanding.
3. Nike (NYSE:NKE). Nike’s board approved of a $5 billion buyback program which will take place over the next four years. The buy back program will commence as soon as its current $3 billion program concludes.
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[...] now that political wrangling is involved), is the announcement of some major stock buybacks. Stock Trading To Go reports on the thinking behind stock buybacks: Companies with cash on hand are taking advantage of depressed stock prices in their own stocks by [...]
I think these buybacks are good for long term holders of the stock, Mircrosoft has no shortage of cash and definitely needs something constructive to do with it anyway.
I’m not sure if I like a Microsoft buyback combined with an increase in the dividend. You would think that a tech company, regardless of how large they are and how much cash they have on their balance sheet, would be able to invest that capital in a manner that would/should add value to shareholders overtime. But then again, I’m not really a tech guy.