Safeway has decided to pay down two billion of its six billion in debt, and use the rest of its newly found Canadian money to buy back shares. By not using all of its Canadian money to pay down debt, Safeway is artificially making its earnings per share look better, hence giving the top executives the ability to fork over more money for themselves. If they really cared about the long term future of Safeway, ALL the Canadian money would be going to pay down debt, which is what is truly needed to allow Safeway to compete with less leveraged grocers in the future.
I like the mgmt. plan. Buy back of shares is shareholder friendly. Paying down that much debt strengthens the balance sheet so they can refinance the rest of the debt at lower rates. The share buyback will really pop the share price and be very painful for any short sellers, which will juice the share price even more. Short interest is 21% of the float, so there is short squeeze potential.
This stock dumped $3.00 a share since the BIG sale. They need to put all of it against their debt, not buy back shares at this overpriced BS. I could see them buying back shares at $18.00 but not $23.00; which has always been the highs after returning to around $18.00-their average.