[PLNI]: Truly Naive Comments on Corporate Share Buybacks from Mr. Pumpy
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In showing his amazing naiveness about Corporate Finance, Mr. Pumpy states that:
"A company seldom will buy back unrestricted common shares. Instead they will retire company owned restricted shares in the issued / outstanding. "
This shows the continued lack of knowledge of Corporate Finance by Mr. Pumpy and points out his continued false and misleading statements that he has been making on message boards.
Contrary to what Mr. Pumpy states above, the fact is that most companies that announce and do stock buyback programs, acquire freely trading unrestricted common stock from the market, to lower the float and the shares outstanding.
The theory behind this is that when a Company has excess cash, it sometimes finds that its most optimal use of the cash is to purchase its own shares in the market, if it believes that they are trading too cheaply. Not only does supply/demand of the stock get influenced here to strengthen the price of the stock, but it sends a strong message to the investment community that the Company believes its stock is trading at a low valuation.
The term "company owned restricted shares in the issued / outstanding" is a definition for treasury shares. A review of public company balance sheets will show that very few will have any significant amount of treasury shares to retire.
Mr. Pumpy continues to show an amazingly total lack of knowledge of Corporate Finance.
http://ragingbull.lycos.com/mboard/boards.cgi?board=PLNI&read=31004
By: rrm_btdt
11 Jan 2006, 04:56 PM EST
Msg. 31004 of 31007
(This msg. is a reply to 30992 by molson_ice1.)
Jump to msg. #
molson: A company seldom will buy back unrestricted common shares. Instead they will retire company owned restricted shares in the issued / outstanding. The net effect is the same and the company need not use real capital assets to to that. The term "buyback" is usually a misnomer for restructured share allocation.
Have not seen a pattern other than that discussed in the TA comments.
rrm
_______________________________________________
.
In showing his amazing naiveness about Corporate Finance, Mr. Pumpy states that:
"A company seldom will buy back unrestricted common shares. Instead they will retire company owned restricted shares in the issued / outstanding. "
This shows the continued lack of knowledge of Corporate Finance by Mr. Pumpy and points out his continued false and misleading statements that he has been making on message boards.
Contrary to what Mr. Pumpy states above, the fact is that most companies that announce and do stock buyback programs, acquire freely trading unrestricted common stock from the market, to lower the float and the shares outstanding.
The theory behind this is that when a Company has excess cash, it sometimes finds that its most optimal use of the cash is to purchase its own shares in the market, if it believes that they are trading too cheaply. Not only does supply/demand of the stock get influenced here to strengthen the price of the stock, but it sends a strong message to the investment community that the Company believes its stock is trading at a low valuation.
The term "company owned restricted shares in the issued / outstanding" is a definition for treasury shares. A review of public company balance sheets will show that very few will have any significant amount of treasury shares to retire.
Mr. Pumpy continues to show an amazingly total lack of knowledge of Corporate Finance.
http://ragingbull.lycos.com/mboard/boards.cgi?board=PLNI&read=31004
By: rrm_btdt
11 Jan 2006, 04:56 PM EST
Msg. 31004 of 31007
(This msg. is a reply to 30992 by molson_ice1.)
Jump to msg. #
molson: A company seldom will buy back unrestricted common shares. Instead they will retire company owned restricted shares in the issued / outstanding. The net effect is the same and the company need not use real capital assets to to that. The term "buyback" is usually a misnomer for restructured share allocation.
Have not seen a pattern other than that discussed in the TA comments.
rrm
_______________________________________________
posted by the_worm06 | 1/11/2006 02:06:00 PM
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