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Tellabs, Inc. Message Board

  • bigputz02 bigputz02 Nov 22, 2012 3:02 PM Flag

    Buyback a waste of money

    I'd hold off for the inevidable telco spending. Short term "fix" for longs that are frustrated. I'd rather them use the money and the dividend to diversify.
    my views

    Sentiment: Hold

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    • I disagree. The buy back is only up to $224M and they have well over $800M in cash and cash equivs. The best time to buy back stock and add value for your share holders is when your share price is unusally low and that is the case for TLABS. We are talking 19 year lows despite the fact the company remians cash flow positive and pays a dividend. I doubt they will be able to buy back that much stock without running the PPS up fairly substantially percentage wise from today's close of $2.87 as they can start buying next Monday. If they alloted half the allowed amount they would drive the stock up over $4. If they buy at an average cost of $3.50 for $112M that would be 32 million shares. The largest holder doesn't even hold that much stock. It will be interesting to see just how aggressively they buy back stock over the next 1 to 4 months as we will only find out on a quarterly basis.

      Sentiment: Strong Buy

      • 2 Replies to tlabslong
      • Hopefully we'll see a bit of a pop in the stock price next week. If they do not immediately begin purchasing shares at this low price, then, unfortunately it will further solidify the reputation management has for being totally incompetent. If the stock price doesn't rise above $3 next week with an increase in volume that would definitely be a negative. On the other hand, a rise in volume and 10-15% pop in the price would be very bullish.

        Sentiment: Strong Buy

      • Now you see long, that BOD action is what is needed, not just trumpeting hopeful market changes. The company needs to get hungry and act accordingly. Stock buy back helps investors, and that is part of their job. Inaction has not helped the price, nor has the inability to diversify its sales force and international operations into new profit centers from new business opportunities. All this R&D is wasted on re-inventing the wheel - just keep making the wheel - but lets also make some new products. This company has the network to re-establish itself, but only with CHANGE.

        Sentiment: Hold

    • Agreed that diversification needed. Buy-back is also good. Both achieve the goal of increasing shareholder value.

      Sentiment: Hold

    • stanleywind Nov 22, 2012 8:06 PM Flag

      don't you think?

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