They issue 50 mil shares/year as executive comp. 15 bill with the stock in the mid 40s is about 335 mil shares. They committed half of the buyback to the next 12 months which means they will be buying at 5 year highs. The buyback will allow execs to sell and prop the stock pure and simple. And I suspect they will borrow at some presently unknown rate to pull it off. All in all this is executive friendly and shareholder unfriendly.
Stock buy back is a double edged sword. On one hand it shows the company has money and is willing to buy their own stock. On the other hand it shows management can't find a better growth source to expand their business. It also implies that the stock needs "Propping Up" from within because there are not sufficient New buyers. Personally, I'm usually torn, but when it's coupled with lowering guidance I think it's more negative then positive.
I also don't think they will buy heavily at these levels. They may not "Time" the market, but they will try to hold back and support a $40 price. I suspect they bought some today to support the stock, but that does not mean they can buy every day. CSCO is a very similar situation. Lowering guidance likely and saying "We are buying back Stock". It's drifting lower with occasional surges, but no real strong buying.
Full disclosure, I bought July $44 puts mid morning today. I'm not short the stock, but think MRK drifts modestly lower this summer.
You said: "It also implies that the stock needs "Propping Up" from within because there are not sufficient New buyers."
Do you think that is why AAPL is buying back their stock?
335 million is about 10% of MRK shares.
you are wrong again. Typically when someone annunoced stock buy back, that means they some sort of problem. they just want to show the surport to thier own stock. MRK's stock was doing well recently, I don't see any reasons why they need to buy at this high level. it is just a preempty action in case.