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Citigroup Inc. Message Board

  • brivy37 brivy37 Jun 13, 2010 8:12 PM Flag

    Question about proposed buyback of shares

    I have a question, if a company says that over the next year they intend to buy back shares, isnt that a good thing. I was looking at EDMC and they had a PR on friday stating that they were going to possibly buy back up to 50 million shares however the stock went down. The EDMC board is dead but I would think that this would be a buying opportunity. Can anyone explain? Thanks in advance. Oh yes and I am long on Citi

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    • Who knows why a stock goes down on any given day? Especially if there is "good news" perceived by the market. Perhaps the buyback is viewed in a negative light, that the future earnings are going to be weak, and thus the buyback to prop up the stock? Or that the cash could be used in better ways (grow business, dividend, pay-off debt, etc...) But in general a stock buyback is a good thing in my opinion, if you are a long-term investor....

 
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