April 25, 2016

Buybacks: Buyside & Sellside Disagree

As I blogged before, buybacks continue to be a source of controversy. Here’s the intro from this IR Magazine article:

More buy-siders than sell-siders believe companies are sacrificing too much to fund expensive share buybacks, according to IR Magazine research into what the investment community thinks about the best way to spend excess cash.

As part of the research for the Investor Perception Study – US 2016, buy-side and sell-side respondents were asked some general questions of interest to the IR community, including: do you think companies are sacrificing long-term organic growth and increasing wages to do buybacks? Forty-one percent of US buy-siders agree with the statement, compared with just 25 percent of those on the sell side. Correspondingly, the sell side is far more likely to disagree with the sentiment (65 percent) than respondents on the buy side (41 percent).

Also see this NY Times’ Gretchen Morgenson’s column

Webcast: “Company Buybacks – Best Practices”

Tune in tomorrow for the webcast – “Company Buybacks: Best Practices” – to hear Skadden’s Kady Ashley, Hunton & Williams’ Scott Kimpel, Simpson Thacher’s Lee Meyerson and Foley & Lardner’s Pat Quick discuss what you should now be considering as you conduct stock repurchase programs. The agenda includes:

1. What is the debate over whether buybacks are the best use of a company’s funds
2. What are the “best practices” for an issuer repurchase program
3. When implementing a buyback, should a Rule 10b5-1 plan be part of it? And if so, what level of control should a company give up? What are the risks?
4. Should a Rule 10b5-1 plan only apply during blackout periods? Should a company just rely on 10b-18 during open windows?
5. How can, and should, a company use multiple 10b5-1 plans/brokers during a certain period
6. How might a stock repurchase stack up against paying cash dividends? Or other alternatives?
7. How to conduct buybacks when engaging in M&A

Cap’n Cashbags: Out-of-Control!

In this 20-second video, Cap’n Cashbags receives $100 million in stock options for the year:

Broc Romanek