An Open Letter to the Intel Board--greatly expand the buyback program...here's how...
Borrow money in the bond market below 3% (take full advantage of Ben's low rates) and then buy back a major portion (half?) of the float. Would be immediately accretive to profits (difference between 4.5% dividend paid on retired stock and lower borrowed rate). Would be a fast way to get the stock price to a more appropriate level, say $32-36. Everyone (except shorts) win. Like Nike says "JUST DO IT!". Thank you.
Stacy Smith, CFO, has to be much more aggressive, imo. Intel should be issuing $50-$60B in debt at these levels, to buy back shares & increase dividend. Believe me, these rates (as close to zero you will ever see), will not last long. There are already signs of pickup in China, Latin America, & eventually the US & Europe will come around. When it happens, we will see a big jump in rates..
The point is they would save the 4.5%+ spent on the dividend for the purchased shares, if the borrowing cost is less (Intel should be able to raise funds below 3% in the 5-10 yr range). The saved money would accrete directly to earnings, and the reduced float would drive the price up 50% or more.