Qualcomm’s (QCOM) board approved a $3 billion share buy-back. The stock moved down after the open and then flattened out at $46.20. Qualcomm is flat this year, while the S&P is up about 20%.
On May 16, Sun Microsystems (SUNW) said it would buy-back $3 billion in stock. That could bring in 15% of the company’s shares. The price has moved from $5.12 to $5.38 since then. That’s about 5%. But, for the last six months, the shares are down almost 5%.
The trouble with these buy-backs is that they cannot hide a troubled company. Qualcomm is still fighting with its largest customer, Nokia (NOK), and is in intellectual property disputes with rival Broadcom (BRCM). Sun has still not be able to demonstrate that it can grow without acquisitions. And, the cost cutting that has helped improve its margins is now largely over.
How about a one-time dividend?
Douglas A. McIntyre
Contact [email protected] for any questions or corrections.
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