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Amgen Inc. Message Board

  • conniecheddar conniecheddar Dec 14, 2011 10:11 AM Flag

    Amgen

    The company that doesn't want people to own their stock in the hopes that it will drive up the remaining shares prices. What a strategy!! I think I learned about this is business school. NOT!

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    • I think it's safe to assume 100%. Look at the rest of the pharma market yesterday - they all decreased while AMGN soared!

    • Does anybody have a formula to determine what proportion of yesterday's and today's rise is caused by the executive change announcement and the dividend increase? I'm assuming that the Goldman Sachs upgrade from sell to neutral was because of the executive change.

    • The dividend is being raised now, after first being established. I like it. This is positive for share holders. And a new CEO. --------------Merry Christmas.

    • Kevin certainly did his part to fleece Medicare when he had the chance, enriching himself in the process. The ESA franchise was ruined by Amgen and J&J because of corporate greed, cut throat competition and regulatory laxness. And you blame Obama. Well, howdydoo to you too.

    • Was trying to make two points and to be funny and failed miserably. Number one I was trying to see if anyone was really alive on this board. I guess there are. The second thing was commenting on the $5B stock buyback. When a company goes in debt to buy back $5B in stock to try to make the stock price go up it stupid in my opinion. They are telling people it is better to not hold its stock and it makes the company go in debt even more. If the stock goes way up, I will be proven wrong but I sincerely doubt it. Now go back to sleep.

      • 1 Reply to conniecheddar
      • Thanks for that clarification.

        Most academic studies show that stocks of companies that conduct share repurchase programs outperform those that do not.

        I believe they need to be done for the correct reason, however. They should not be done in an effort to prop up the stock price. This will fail. The stock will eventually follow the fundamentals.

        Share repurchase programs should be conducted when the stock price is trading at a significant discount to its intrinsic value.

        In Amgen's case, I estimate intrinsic value to be $76 based upon a Discounted Cash Flow model. If they can retire 10% of their shares at a significant discount to that price, I am all for it.

        My criticsm of their recently completed Dutch Auction Tender Offer is that I think they paid more than than they needed to. I think they could have retired 10% of their total outstanding shares by offering a price between $56 and $58, rather than a range of $54 to $60.

        Of course most investors are going to tender at the top end of the range! I think AMGN spent over $100 million more than they needed to by offering $60 rather than $58.

        Now that the Dutch Auction Self Tender Offer is over, the stock will find its own level...a level that will be lower than it otherwise would have, because they have over $100 million less in the bank than they could have had, all other things being equal.

    • Could you elaborate on your post? I may be stupid, but I've read it about 5 times and still can't figure out the point you made.

    • Link please.

 
AMGN
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