Goldman has the shares. Probably from buying stock in the general market for their own account and perhaps from 1 or 2 holders who want out. They know GILD has a buyback in place, which means the door is opened to show the company blocks of stock. That is what happened. Goldman showed GILD 500,000 shares with price tag that fits within the rules of stock buy-backs. (I could go on about the rules), but suffice it to say Goldman knows them, and they benefit the broker in this situation.) GILD says they'll buy the stock and the transaction is going to the tape. None of this happens if GILD is trading down, but now that it is trading up, the numbers really make sense for one party in particular. Goldman.
I'm long GILD, and I love the stock. But, I view this as a moderate negative for the near-term. GILD burns a chunk of their buy-back money at some-what run up prices, and Goldman runs off with the dough. In this case GILD's management got played.
I know exactly what GILD has, and I'm a true believer. But, this piece of Buy-Back news, and the way it was handled is a negative. Is it a small negative compared to the other positives, likely. But, it is negative non-the-less. And, I was commenting on the notion that the stock would trade up on the buy-back news. This is bad logic for the reasons I stated. GILD paid up, and the money went right into Goldman's pockets. It may or may not trade up today, but it won't be up on the buy-back news.