Sun Microsystems Inc has pulled the other stunt almost guaranteed to drive your share price up, a major stock re-purchase scheme to buy back another tranche of the shares it will issue as part of a long-term equity incentive plan announced in 1990. Last week announced that it’s splitting it’s stock two-for-one come November (CI […]
Sun Microsystems Inc has pulled the other stunt almost guaranteed to drive your share price up, a major stock re-purchase scheme to buy back another tranche of the shares it will issue as part of a long-term equity incentive plan announced in 1990. Last week announced that it’s splitting it’s stock two-for-one come November (CI No 2,975). Sun had almost $1,000m of cash at the year end in June (CI No 2,959). The company said the purchase program, spread over the next three years won’t exceed $ 450m, and will be funded from available working capital. It ran a similar re-purchase scheme, which terminated in 1993, buying back shares from the same plan. The buy-back is aimed at avoiding dilution caused by the share issues from the scheme. It’s a trade-off between rewarding employees for good work and looking after the value of the earnings per share line. The company plans to re-issue the shares it buys back at some point in the future.
