can someone explain?
8 replies (most recent on top)
@1xoc Trying to time the market correctly is a terrible investment strategy. Only short term investors bother with that. Long term investors put their money in a company for years and don't worry about market ups and downs.
Because We would have overpaid for NXP. Amazing mgmt does get deal they want and stock goes up. That is a stellar mgmt team.
There is nothing stopping those long-term investors from selling on the way up. If they ride the price up and then back down, that is their problem.
@tov He means that QCOM is in higher demand now because share buybacks drive the price up. So people are buying the stock now in anticipation of selling at a higher price when the buyback is complete.
The market cap of the company will not change by buying back shares. The same value and earnings are just spread over fewer shares. This is only good for short term investors who bought (or will buy) low and intend to divest their position once their shares represent a larger portion of the pie.
(Aside: longer term investors would benefit more from a special dividend instead. $30B distributed over 1.5B shares would have been around $20 per share. Instead of rewarding long term shareholders with a special dividend, management predicatbly rewards greedy opportunists.)
Think of $30 billion buyback as a cash dividend paid back to stockholders except is not distributed as dividend. Is accretive.
@eic it’s not supply/demand today dipshit. Qcom did not buy any billions of dollars of shares today
Q is investing 3/4 of his whole cash for it. This is a huge amount. N couldn't do it. Quite attractive for investors.
This could be another technique to move the cash from overseas to US in the fastest way. You never know what else Trump will do for the markets where US companies make revenue .
Q is spending $30b buy back stock. Simple supply and demand. The question is what happen next now that Q needs to pay more but get less shares.....