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15-2 Buybacks 2 - Corporations start to shrink Stock...

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Corporations start to shrink Stock Buybacks Source: Wall Street Journal, 22 May 2002 Corporate buybacks aren't what they used to be. In recent weeks, a number of well-known companies such as International Business Machines Corp. and Aetna Inc. initiated stock-repurchase plans. But data from the first quarter show the actual number of companies taking advantage of buyback programs has shrunk, as cash has become a luxury. "If you go back into the late-1990s and 2000, we were averaging $40 billion per quarter in buybacks," said Richard Peterson, chief market strategist at Thomson Financial Securities Data. "That has sig- nificantly contracted in the first quarter of 2002 with less than $20 billion in repurchases." Mr. Peterson said the second quarter is shaping up to be even more sluggish for buybacks, with only about $12 billion to $13 billion of repurchasing activity anticipated. The reason is simple. Buyback programs are reliant on companies having the extra cash to fund their re- purchases. But during the last bear market, with dis-
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