15-2 Buybacks 2

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

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 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-purchases....
View Full Document

Ask a homework question - tutors are online