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On Tue, 9 Jun 2009 11:15:23 -0400, "sid9" <...@bellsouth.net
"E. Barry Bruyea" <...@goaway.commessage
news...@4ax.com...
Logic escapes Kennie.
If Walmart thought the price of their stock was
going to fall they would postpone the buy back.
If Walmart thought the price of their stock was
going to rise they would accelerate the buy back.
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Anonymous Wrote:
On Jun 9, 6:46 am, Wide Eyed in Wonder <...@hotmail.com
Companies buy and sell their own stock all the time. First, to buy
its own stock, the company has to have an excess of cash. If the
first criterion is met, then one of the reasons, and most common, is
that the company believes that the stock is undervalued and is
expected to rise.
A company sells its own stock for a multitude or reasons. Selling
does not necessarily mean that the company believes that the stock is
over valued. For example, it might want cash for expansion or
research and selling stock might be cheaper than borrowing.
Jane.
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On Tue, 9 Jun 2009 12:45:32 -0700 (PDT), The_Carpathia <...@yahoo.com
However, this stock is at its five year average, NOW...a feat not
shared by many others in this market. So, they DON'T expect it is
undervalued....so, again...WHY are they buying it up?
Kenneth W Clifton
http://www.2009jesus.com
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On Tue, 9 Jun 2009 13:23:54 -0700 (PDT), "Do any of you remember the Republican Party?" <...@gmail.com
On Jun 9, 3:46 am, Wide Eyed in Wonder <...@hotmail.com
You always seem to be a little skewed from the truth. You're the guy
at the football game facing the wrong way. Read Jane's concise and
intelligent response. You want things to so badly be one way that you
ignore everything that counters your beliefs. Try this: learn how
things work, study the data, and then reach a conclusion. Don't start
with the conclusion first and then work backwards.
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On Tue, 9 Jun 2009 09:10:35 -0700, "Wayne" <...@verizon.net
"Wide Eyed in Wonder" <...@g20g2000vba.googlegroups.com...
Maybe they think their own stock is undervalued, and they want to put some
excess cash to work.
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On 9 Jun 2009 19:25:01 GMT, Michael Coburn <...@verizon.net
acc0...@g20g2000vba.googlegroups.com...
They (the management) seek to become the defacto owners; to limit the
control of others by limiting the number of owners. They (the
management) probably have some very lucrative stock options to boot.
--
"Those are my opinions and you can't have em" -- Bart Simpson
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On Tue, 9 Jun 2009 12:47:57 -0700 (PDT), The_Carpathia <...@yahoo.com
On Jun 9, 12:10 pm, "Wayne" <...@verizon.net
Their stock is at its five year average, NOW...having stayed strong as
a discount retailer. So, that doesn't work. Indeed, IF the market
was going to recover, their business would drop, as people returned to
the malls. If that happened, they would need their extra money to
compensate. So, why are they BUYING up their stock?
Kenneth W Clifton
http://www.2009jesus.com
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Anonymous Wrote:
On Jun 9, 3:47 pm, The_Carpathia <...@yahoo.com
There are many reasons, as I stated in an earlier post. The company
has cash, so what does it do with that cash? Many people are familiar
with the p/e ratio, which is the price to earnings ratio.
What is less familiar is the e/p ratio, the inverse of the p/e. The e/
p ratio is similar to a percentage of interest on money invested.
With the current Walmart e/p ratio, it would be similar to putting the
money in a 7% interest bearing account. So, tell me. If you had cash,
would you put it into an account earning 7%? I would.
Jane
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On Tue, 9 Jun 2009 13:03:52 -0700 (PDT), The_Carpathia <...@yahoo.com
When a company buys their own stock, it doesn't get interest back on
that money...it doesn't get that money..PERIOD. It's gone....to the
shareholders they paid off. So, AGAIN...why would they buy up their
own stock, rather than prepare for when people leave for department
stores...unless they expected it to get worse?
Kenneth W Clifton
http://www.2009jesus.com
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Anonymous Wrote:
On Jun 9, 4:03 pm, The_Carpathia <...@yahoo.com
It's not gone, as you stated. The shares are owned by the company and
can be resold later, when the stock goes up. Companies do this all
the time.
Jane.
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On Tue, 09 Jun 2009 16:39:41 -0400, alexy <...@asbry.net
The_Carpathia <...@yahoo.com
Well, Jane's analogy may not have been perfect, but here point was
correct. Maybe a simplified illustration would help:
Hypothetical BEFORE:
Earnings from operations: $10,000
Cash: $10,000
Interest earnings on cash (2%): $200
Total Earnings: $10,200
P/E: 15
Market value: $153,000
Shares outstanding: 3,060
Share Price: $50
Hypothetical share purchase: 200 shares @ $50
Hypothetical AFTER:
Earnings from operations: $10,000
Cash: $0
Interest earnings on cash (2%): $0
Total Earnings: $10,000
P/E: 15
Market value: $150,000
Shares outstanding: 2,860
Share Price: $52.45
In fact, increasing their leverage will probably decrease their P/E,
but that's the general idea.
Jane: I think this is just another perspective on the same point you
are making, but if you disagree, speak up.
--
Alex -- Replace "nospam" with "mail" to reply by email. Checked infrequently.
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On Tue, 09 Jun 2009 07:37:24 -0400, ObamaBinLyin <...@prompter.fed
if they thought the market was going to tank why not wait till it tanks
then buy it cheap?
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On Tue, 9 Jun 2009 05:20:44 -0700 (PDT), The_Carpathia <...@yahoo.com
On Jun 9, 7:37 am, ObamaBinLyin <...@prompter.fed
They aren't buying the stock of other companies. They are buying up
their OWN stock, so there is less market effect on their stock. THINK
about it. If the market rises, their equity increases...right?
Wouldn't they LIKE that equity increase in their finaicials? Why
sell, then, unless they are expecting a drop...thus my post.
Further, they WANT their shareholder's stock to rise to encourage more
stock sales. By buying up the shares, they are limiting that
option....specifically, they are protecting their stock record from
recording a massive drop in its history.
Kenneth W Clifton
http://www.2009jesus.com
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On Tue, 09 Jun 2009 11:51:31 -0400, alexy <...@asbry.net
The_Carpathia <...@yahoo.com
No. Equity increases due to retained earnings or sale of new shares.
You seem to be confusing equity with market value of the company.
If due to profits, yes. If due to sale of stock to raise needed cash,
yes. If due to conversion of convertable debt, maybe not. They would
like the market value of the company to increase, but that is not an
item in their financials.
Right, they would sell if they felt that the stock was over-valued or
they needed the cash. But you said they were buying.
You seem to be confused.
--
Alex -- Replace "nospam" with "mail" to reply by email. Checked infrequently.
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On Tue, 9 Jun 2009 16:15:08 +0000, Stray Dog <...@sdf.lonestar.org
Maybe, not no.
Equity should be sume of all values (physical plant, inventory, # shares
times price per share) unless equity has caveats.
You are missing his point: if they buy cheap now, and the economy goes up
further and WM stock has already gone up since they are one of the few
making more money as time goes by, then WM executives are getting their
hands on stock that will appreciate in value.
They are buying, not selling.
to raise needed cash,
What makes you thik they need cash?
Not if they are paying interest on that debt.
They would
Only if they were going to let themselves be bought, as in management-led
IPO.
but that is not an
Why?
The other obvious possibility might be a hostile takeover by China
Sovereign wealth fund.
As a matter of fact, trends in recent years have been for many
corporations to be buying back their stock as an anti-takover strategy.
His question is valid. If WM can "manipulate" its own stock price upward
and get a bandwagon effect, then they can cash out in the future and be
ready for the next wave of expansion with plenty of money. Buy up other
chains whose stock is tanking? Just like back in the late 1800s with the
"robber-barrons"!
Its been done before.
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On Tue, 09 Jun 2009 13:41:18 -0400, alexy <...@asbry.net
Stray Dog <...@sdf.lonestar.org
If the market rises, their equity might rise or might not. Hence the
statement "if the market rises, their equity increases" is false. Thus
my "no" in response to the question asked. If he had instead asked "if
the market rises, with their equity increase?", then I'd agree with
your "maybe" answer.
Not even close. Ignores liabilities. Outstanding shares can't be added
to assets.
But that is an example of where they would want equity to go up.
I don't have an opinion one way or the other on that, just stating a
possible condition in which they would want equity to go up.
Hence the "maybe" in my response.
You think they would want the market value to increase in advance of
an IPO?
Accounting 101
That's another good alternative reason to the one Kenneth posited.
I'm not sure what makes a question "valid" or "invalid". But he has
received several answers, including the one you added about
anti-takeover. I wonder if he will see the reasonableness of these
alternative explanations.
Is that what you gathered he meant when he said:
: their assessment is that the
: market is about to tank...again? Anyone want to give me another
: reason for their stock repurchases?
--
Alex -- Replace "nospam" with "mail" to reply by email. Checked infrequently.
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On Tue, 9 Jun 2009 18:11:24 +0000, Stray Dog <...@sdf.lonestar.org
Wrong on the grounds that the meaning of the original sentence was based
on share price going up, and based on several possibilities, including
current trends _and_ if they buy their own stock, it will rise even more.
Thus
Wrong as I explained above.
If he had instead asked "if
Now, you are agreeing with _him_.
Irrelevant to the original idea of share price rising holding all other
variables constant.
Now, you are being circular and saying the same thing as the OP.
You were the one who said "to raise needed cash...."
just stating a
And, the "maybe" in my response.
It has happened in all the WSJ articles when a company is in play.
P.S. they would want it to keep increasing like all companies want their
stock to keep increasing. The only time they would want price to go down
is if it helps them buy their own inventory back or do a takeover
themselves.
Not a good answer.
Fine.
He had the right idea, if not in details.
I don't know who is "their" but the question should be if the market
moves, how will WM move compared to the market.
Or, should we ask if WM released detailed transcripts of any and all
discussions behind this decision.
Anyone want to give me another
Stock market strategic thinking -- outside of manipulations, insider
trading, tricky-cheaty-sneaky crap (such as analyst/broker propaganda) --
is barely approachable on fundamentals.
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On Tue, 09 Jun 2009 15:21:52 -0400, alexy <...@asbry.net
Stray Dog <...@sdf.lonestar.org
So in your accounting system, buying back their stock increases their
equity? I see.
Actually, that was an over-simplification on my part. they want share
value (adjusted for splits and dividends) to go up. And there are
probably exceptions to that, if one thinks long and hard about it.
Okay. I misread that as "LBO".
But all you are going to get. While the concept that market price of a
company (market value) is different from its equity (book value) is
not real difficult, I am not going to try with you, given your belief
that an asset gets converted to a liability if it generates losses, or
that buying back company stock INCREASES equity.
I suspect that is true for you. But for those who understand the
concepts, it is very approachable _on the fundamentals_.
--
Alex -- Replace "nospam" with "mail" to reply by email. Checked infrequently.
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On Wed, 10 Jun 2009 13:20:41 +0000, Stray Dog <...@sdf.lonestar.org
I think you are trying to enjoy trying to create a strawman.
As I stated, and, as usual, you love to take out of context so you can try
to put in another irrelevant context, the whole point was based on the
strategy that buying low would be a good strategy if price went up, as any
stock arbitrageur dreams and recent trends in Walmart sales figures should
boost stock prices on pure herd instinct rationality.
Well, now you are going from your over-simplification to speculations
beyond the original considerations.
Here again is your attempt to create a strawman when the original line of
thinking was purely an easy to grasp idea of "buy low, now, because share
price should go up" or "protect from raiders [eg. China]"
I am not going to try with you, given your belief
This sure sounds like leftover dust from the "alexy-vs.-Video" debate
months ago and I did not start that debate but Video had the right idea
about the problem he was noticing while YOU tried to bring up all kinds of
diversionary theoretical accounting minutia.
Considering the whole range of Enron/Worldcom/Andersen to AIG/Bear
Stearns/Lehman crap out there, its pretty clear that its true for all of
those entities I just named, More below....
But for those who understand the
For those who understand the concepts behind the tricky-cheaty-sneaky
crap, then it is fundamentally approachable how to pump money out of "the
system" (lots of WSJ articles since '82)..... all until it blows up in
your face, the faces of the "brilliant ones" (at AIG, etc.), and the
10-15% of innocent bystanders who are now out of work or on reduced
payrolls or reduced worktime, and will be for who knows how many years,
and will negatively affect another 10-20% of the population who are
dependant on the primary wage earner. With the "brilliance" of "those
who understand" we're in the worst world wide economic disaster since
1930s because of those "very approachable... fundamentals."
No cigar for you.
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On Wed, 10 Jun 2009 09:46:34 -0400, alexy <...@asbry.net
Stray Dog <...@sdf.lonestar.org
Just pointing out the absurdity of the claim you made. And back to the
absurdity of the claim that "if the market rises, their equity
increases", I could have pointed out that (~Q&P)=how you hate to have logic come into discussions.
Actually, we are in agreement there. Do you realize that by claiming
that they are buying stock in anticipation of its increasing, that you
are countering the claim of the OP that they are buying stock in
anticipation of it going down?
Not at all. I was responding to YOUR question about why the market
value of the company is not an item in their financials.
Original line of thinking? He said
: I was puzzled in hearing, yesterday, that Wal Mart was going to buy up
: it's own stock. There is only one conclusion that I could come to as
: to why they did it. I asked others for their opinions..all confirmed
: my conclusions. The only reason we could come up with is that they
: wanted out of the market...specifically, they wanted less market
: influence on the company. Why?
:
: Think about that. WHY would Wal Mart want LESS influence of the
: market on their balance sheet, unless their assessment is that the
^^^^^^^^^^^^^^^^^^^^^^^^^^^^
: market is about to tank...again? Anyone want to give me another
^^^^^^^^^^^^^^^^^^^^^^^
: reason for their stock repurchases?
I don't usually read "the market is about to tank" as meaning "share
price should go up"
But then again, I don't have your reading comprehension abilities.
--
Alex -- Replace "nospam" with "mail" to reply by email. Checked infrequently.
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